What is the definition of shares issued at a premium?

Shares issued at a premium refer to the shares that are sold for a price that exceeds their nominal or par value. When shares are issued at a premium, the excess amount above the nominal value creates a non-distributable reserve known as the share premium account. This reserve cannot be distributed to shareholders as dividends but can be used by the company for purposes such as issuing bonus shares or writing off expenses related to issuing the shares.

This concept is important as it influences how a company's equity base is structured and indicates the market's confidence in the company's value beyond just the nominal share price. The other options do not accurately capture this definition: selling shares at a value below nominal value refers to a discount, while issuing shares for free to employees pertains to different employee incentive schemes, and shares requiring payment in installments describes a different financing structure.