Share premium account
Okay, kiddo, so when a company wants to raise money to grow and do cool things, it can sell shares to people who want to invest in the company.
The money the company gets from selling those shares is called "share capital." But sometimes, people who want to invest in the company are willing to pay more for each share than what the company initially set as the selling price.
The extra money that the company gets from selling those shares at a higher price than usual is called "share premium." It's like when you sell a toy for $5, but someone really wants it and is willing to pay $10 for it. The extra $5 you get is like a premium.
This share premium money goes into a special bank account called the "share premium account." The company can use the money in this account for a few things, like to pay off debts or to invest in new projects.
So, basically, the share premium account is like a piggy bank for the extra money a company makes when people are willing to pay more for its shares than what the company initially set as the selling price.
The money the company gets from selling those shares is called "share capital." But sometimes, people who want to invest in the company are willing to pay more for each share than what the company initially set as the selling price.
The extra money that the company gets from selling those shares at a higher price than usual is called "share premium." It's like when you sell a toy for $5, but someone really wants it and is willing to pay $10 for it. The extra $5 you get is like a premium.
This share premium money goes into a special bank account called the "share premium account." The company can use the money in this account for a few things, like to pay off debts or to invest in new projects.
So, basically, the share premium account is like a piggy bank for the extra money a company makes when people are willing to pay more for its shares than what the company initially set as the selling price.
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