(1) If a company issues shares at a premium (whether for cash or otherwise),the company shall—
(a) if it has not already done so, establish an account to be called the share premium account; and
(b) transfer to that account an amount equal to the aggregate amount or value of the premiums on those shares.
(2) If, on issuing shares, a company has transferred an amount to its share premium account, it may use the amount to write off— (a) the expenses of the issue of those shares; and
(b) any commission paid on the issue of those shares.
(3) The company may use its share premium account to pay up new shares that are to be allotted to members as fully paid bonus shares.
(4) Subject to subsections (2) and (3), the provisions of this Act relating to the reduction of a company's share capital apply as if the company's share premium account were part of its paid up share capital.
(5) This section has effect subject to sections 387, 388 and 390.
(6) If a company fails to comply with subsection (1), the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings.
(a) if it has not already done so, establish an account to be called the share premium account; and
(b) transfer to that account an amount equal to the aggregate amount or value of the premiums on those shares.
(2) If, on issuing shares, a company has transferred an amount to its share premium account, it may use the amount to write off— (a) the expenses of the issue of those shares; and
(b) any commission paid on the issue of those shares.
(3) The company may use its share premium account to pay up new shares that are to be allotted to members as fully paid bonus shares.
(4) Subject to subsections (2) and (3), the provisions of this Act relating to the reduction of a company's share capital apply as if the company's share premium account were part of its paid up share capital.
(5) This section has effect subject to sections 387, 388 and 390.
(6) If a company fails to comply with subsection (1), the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings.
Check the current authoritative text and amendment history before relying on a provision.