Malaysia legislation
Section 37
Section 37
Share premium account
(1)
Where a Langkawi company issues shares at a premium, whether for cash or otherwise, 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 Langkawi company shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company.
(2)
Where assets are acquired by the issue of shares of a
Langkawi company and no consideration is recorded, the assets so acquired shall be valued, and if the value of the assets is more than the par value of such shares, the difference between the par value of the shares and the value of the assets so acquired shall be transferred to the share premium account.
44
Act 643
(3)
The share premium account may, notwithstanding anything contained in subsection (1), be applied by the Langkawi company—
(a)
in paying up unissued shares to be issued to members of the company as fully paid bonus shares;
(b)
in writing off—
(i)
the preliminary expenses of the company; or
(ii)
the expenses of, or the commission paid or discount allowed on, any issue of shares in, or debentures of, the company; or
(c)
in providing for the premium payable on redemption of debentures or redeemable preference shares.
(4)
Where shares are issued for a consideration other than cash under subsection (2), the shares shall not be allotted until—
(a)
the undertaking constituting the consideration has been performed; or
(b)
the assets constituting the consideration have been transferred to the company; and assets shall be considered as transferred to a company—
(i)
in the case of goods, when the ownership or property therein passes to the company or when they are delivered to it;
(ii)
in the case of negotiable instruments, when the company becomes entitled to enforce all the rights embodied in them in its own name without the concurrence of any other person; and
(iii)
in any other case, when the ownership or lesser rights agreed to be vested in the company are legally vested in it.