Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 191

191. (1) Where a company issues shares for which it receives a premium,
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 subsection 195 (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 under 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.