(1) Where a 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 company shall, except as provided in this section and section 207(2) of the Companies Act, 1990, apply as if the share premium account were paid up share capital of the company.
(2) The share premium account may, notwithstanding anything in subsection (1) be applied by the company in paying up unissued shares of the company (other than redeemable shares) to be allotted to members of the company as fully paid bonus shares, in writing off
(a) the preliminary expenses of the company, or
(b) the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company;
or in providing for the premium payable on redemption of any redeemable