Security premium cannot be used for what purpose?

Security premium is the excess of the amount received by a company for issuing shares over the face value of the shares. It is a capital reserve and cannot be used for the distribution of dividend to members.

The other options are correct.

A. Giving bonus shares to members: Security premium can be used for giving bonus shares to members.

B. Writing-off preliminary expenses of company: Security premium can be used for writing-off preliminary expenses of company.

C. Writing-off discount on issue of debenture: Security premium can be used for writing-off discount on issue of debenture.