Commonwealth Numbered Acts

COMPANIES ACT 1981 No. 89 of 1981 - SECT 119

119. (1) Where a company issues shares for which a premium is received by the
company, whether in cash or in the form of other valuable consideration, a sum
equal to the aggregate amount or value of the premiums on those shares
shall be transferred to an account to be called the ''share premium account'',
and the provisions of this Act relating to the reduction of the share capital
of a company, other than sub-section 123 (6) apply, subject to this section,
as if the share premium account were paid-up share capital of the company.

(2) The share premium account may be applied-

   (a)  in paying up unissued shares to be issued to members of the company as
        fully paid bonus shares;

   (b)  in paying up in whole or in part the balance unpaid on shares
        previously issued to members of the company;

   (c)  in the payment of dividends, if those dividends are satisfied by the
        issue of shares to members of the company;

   (d)  in the case of a company that carries on life insurance business in
        Australia-by appropriation or transfer to any statutory fund
        established and maintained pursuant to the Life Insurance Act 1945;

   (e)  in writing off-

        (i)    the preliminary expenses of the company; or

        (ii)   the expenses of, or the payment made in respect of or discount
               allowed on, any issue of shares in, or debentures of, the
               company; or

   (f)  in providing for the premium payable on redemption of debentures or
        redeemable preference shares.