share premium

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.

Collins Dictionary of Law © W.J. Stewart, 2006