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Distributing the capital premium

Author

Listed:
  • Sebastian Bodu

    (Romanian-American University)

Abstract

Permission of distributing the capital premiums is equivocally in Law no. 31/1990, because such premiums are not part of the profit not of the legal capital (and the mandatory reserves). Of course there is temptation to distribute such premiums, but the law incriminates fictive profit distributions. If the concept of par value of the shares would not have been in place, and shares would be issued at the market value, all such value would be registered in one account, which means that the legal nature of the premiums is closer to the legal capital than to the profit.

Suggested Citation

  • Sebastian Bodu, 2018. "Distributing the capital premium," Social-Economic Debates, Association for Entreprenorial Spirit Promotion, vol. 7(2), pages 10-15, August.
    • Handle: RePEc:sdb:social:v:7:y:2018:i:2:p:10-15
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    More about this item

    Keywords

    Issuance premiums; profit; loss; distribution; shareholders; reserves;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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