share premium

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Also found in: Dictionary, Financial.
Related to share premiums: Capital surplus, Additional Paid In Capital

share premium

the excess of the issue price of a share over its nominal value. A company's share premium account exists for certain defined purposes, namely:
  1. (i) to issue fully paid bonus shares;
  2. (ii) to write off preliminary expenses;
  3. (iii) to write off the expenses of, or any discount allowed on, any issue of shares or debentures;
  4. (iv) to provide for any premium payable on the redemption of debentures.
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