Section 99, The Companies Act, 2009

(1) Shares of a company may be issued at a premium. (2) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium on those shares shall be transferred to an account, to be called “the share premium account”; and the provision of this Act relating to the reduction of share capital of a company shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company. (3) Notwithstanding anything to the contrary in subsection (2), the share premium account may be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares, in writing off– (a) the preliminary expenses of the company; or (b) the expenses of, or the commission paid or discount allowed on, issue of shares of the company; or in providing for the premium payable on redemption of any redeemable share of the company. (4) Where a company has, before the commencement of this Act issued any shares at a premium, this section shall apply as if the shares had been issued after the commencement of this Act; but any part of the premium which has been so applied that it does not at the commencement of this Act form an identifiable part of the company’s reserves within the meaning of this Act shall be disregarded in determining the sum to be included in the share premium account.