{"id":2269,"date":"2019-08-09T02:15:30","date_gmt":"2019-08-09T02:15:30","guid":{"rendered":"https:\/\/commerceiets.com\/?p=2269"},"modified":"2019-08-09T02:15:30","modified_gmt":"2019-08-09T02:15:30","slug":"sweat-equity-shares","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/sweat-equity-shares\/","title":{"rendered":"SWEAT EQUITY SHARES"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#MEANING\" title=\"MEANING\">MEANING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#CONDITIONS_FOR_ISSUE_OF_SWEAT_EQUITY_SHARES\" title=\"CONDITIONS FOR ISSUE OF SWEAT EQUITY SHARES\">CONDITIONS FOR ISSUE OF SWEAT EQUITY SHARES<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#ELIGIBILITY_OF_THE_DIRECTOR_OR_EMPLOYEE\" title=\"ELIGIBILITY OF THE DIRECTOR OR EMPLOYEE\">ELIGIBILITY OF THE DIRECTOR OR EMPLOYEE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#CATEGORY_OF_SHARES\" title=\"CATEGORY OF SHARES\">CATEGORY OF SHARES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#TIME_GAP\" title=\"TIME GAP\">TIME GAP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#TIME_LIMIT_FOR_ISSUING_SWEAT\" title=\"TIME LIMIT FOR ISSUING SWEAT\">TIME LIMIT FOR ISSUING SWEAT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#AUTHORISATION_BY_SHAREHOLDERS_OR_PASSING_OF_RESOLUTION\" title=\"AUTHORISATION BY SHAREHOLDERS OR PASSING OF RESOLUTION\">AUTHORISATION BY SHAREHOLDERS OR PASSING OF RESOLUTION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#CONTENTS_OF_SPECIAL_RESOLUTION\" title=\"CONTENTS OF SPECIAL RESOLUTION\">CONTENTS OF SPECIAL RESOLUTION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#NOTICE_OF_GENERAL_MEETING\" title=\"NOTICE OF GENERAL MEETING\">NOTICE OF GENERAL MEETING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#VALUATION\" title=\"VALUATION\">VALUATION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#LIMIT_ON_SWEAT_EQUITY\" title=\"LIMIT ON SWEAT EQUITY\">LIMIT ON SWEAT EQUITY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/#REGISTER_OF_SWEAT_EQUITY_SHARES\" title=\"REGISTER OF SWEAT EQUITY SHARES\">REGISTER OF SWEAT EQUITY SHARES<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"MEANING\"><\/span>MEANING<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-medium-font-size\">Sweat Equity Shares are the shares issued by the <a href=\"https:\/\/commerceiets.com\/joint-stock-company\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"company (opens in a new tab)\">company<\/a> to its employees or directors at a discount or for consideration other than cash. These shares are issued as a reward to the directors and shareholders.<\/p>\n\n\n\n<p class=\"has-background has-medium-font-size has-pale-cyan-blue-background-color\"><strong>ACCORDING TO COMPANIES ACT 2013<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">\u201cSweat equity shares\u201d means such equity shares, which are\nissued by a Company to its directors or employees at a discount or for\nconsideration, other than cash, for providing their know-how or making\navailable rights in the nature of intellectual property rights or value\nadditions, by whatever name called.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"CONDITIONS_FOR_ISSUE_OF_SWEAT_EQUITY_SHARES\"><\/span>CONDITIONS FOR ISSUE OF SWEAT EQUITY SHARES<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ELIGIBILITY_OF_THE_DIRECTOR_OR_EMPLOYEE\"><\/span><strong>ELIGIBILITY OF THE DIRECTOR OR EMPLOYEE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Such shares can be issued only to<\/p>\n\n\n\n<ul><li>a permanent employee of the company who has been working in India or outside India, for at least last one year; or<\/li><li>to a director of the company, whether a whole time director or not; or<\/li><li>an employee or a director mentioned above of a subsidiary, in India or      outside India, or of a holding company of the company<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"CATEGORY_OF_SHARES\"><\/span>CATEGORY OF SHARES<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">These shares can be issued only out of that category, the shares of which have also been issued.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"TIME_GAP\"><\/span>TIME GAP<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Sweat equity shares can be issued only if the business has\ncompleted the one year from its commencement.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"TIME_LIMIT_FOR_ISSUING_SWEAT\"><\/span>TIME LIMIT FOR ISSUING SWEAT<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Allotment of sweat equity shares shall be made within 12\nmonths from the date of passing special resolution.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"AUTHORISATION_BY_SHAREHOLDERS_OR_PASSING_OF_RESOLUTION\"><\/span>AUTHORISATION BY SHAREHOLDERS OR PASSING OF RESOLUTION<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The company must pass the special resolution in the general\nmeeting for the issuance of sweat equity shares.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"CONTENTS_OF_SPECIAL_RESOLUTION\"><\/span>CONTENTS OF SPECIAL RESOLUTION<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The special resolution must specify the following:<\/p>\n\n\n\n<ul><li>Number of shares<\/li><li>Current market price<\/li><li>Class of directors or employees to whom such\nequity shares are to be issued<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"NOTICE_OF_GENERAL_MEETING\"><\/span>NOTICE OF GENERAL MEETING<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Critical elements of Valuation Report shall be sent along\nwith the Notice. Particulars like class of shares, price, consideration,\nprincipal terms of conditions, employees to whom sweat is proposed is required\nto be mentioned in explanatory statement.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"VALUATION\"><\/span>VALUATION<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Valuation of sweat shares and intellectual property rights (IPR)\/know\nhow\/ value additions shall be done by Registered Valuer.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"LIMIT_ON_SWEAT_EQUITY\"><\/span>LIMIT ON SWEAT EQUITY<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">In a year, sweat shares shall not exceed 15% of existing\npaid up equity share capital or shares having issue value of \u20b9 5 crores, whichever\nis higher. However, it should not exceed 25% of paid up equity capital of\nCompany at any time.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"REGISTER_OF_SWEAT_EQUITY_SHARES\"><\/span>REGISTER OF SWEAT EQUITY SHARES<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The details of sweat shares shall be mentioned in this\nRegister. The register shall be maintained at Registered Office or such other\nplace as the Board may decide. The entries shall be authenticated by Company Secretary\nof the Company or by any other person authorized by Board.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>MEANING Sweat Equity Shares are the shares issued by the company to its employees or directors at a discount or for consideration other than cash. These shares are issued as a reward to the directors and shareholders. ACCORDING TO COMPANIES ACT 2013 \u201cSweat equity shares\u201d means such equity shares, which are issued by a Company&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/sweat-equity-shares\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;SWEAT EQUITY SHARES&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":2270,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,102],"tags":[124],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2269"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=2269"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2269\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/2270"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=2269"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=2269"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=2269"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}