Quick Reference to
" Issue of Sweat Equity Shares " :-
Legal Provision:-
Section 2(88), 54 of Companies Act, 2013.
Rule 8 of Companies ( Share Capital and Debentures) Rules, 2014.
Companies (Share Capital and Debentures) Third Amendment Rules, 2016 - 19th July , 2016 .
Points:-
1. Sweat Equity Shares are issued by Company to its Director or employees.
2. It is issued at Discount for consideration other than cash.
3. Those shares are issued for providing their Know-how or value addition by them or making available rights in IPR.
4. Permanent employee of the company who have worked at least for 1 year is entitled for Sweat Equity Shares.
5. Special Resolution at general meeting is require to Issue of Sweat Equity Shares.
6. The company should have completed 1 year from Commencing it's business.
7. Listed company is require to follow SEBI Regulations.
8. The company shall not issue Sweat Equity Shares for more than 15% of existing paid up Equity share Capital or Issue value of Shares of ₹ 5 dr (whichever is higher) .
It shall be more than 25% of paid up Equity Share Capital at any time.
9. Startup Company may issue Sweat Equity Shares upto 50% of paid up Capital upto 5 years from incorporation of company.
10. The Locked in period for Sweat Equity Shares is 3 years from the date of allotment.
11. Swart Equity Shares can be issued at Discount.
12. The validity of Special Resolution for Issue of Sweat Equity Shares is of 1 year from the date of passing Special Resolution.
13. The rights, limitations, restrictions which are Applicable to Equity Shares shall also be applicable to Sweat Equity Shares.
14. The amount of Sweat Equity Shares shall be treated as a part of managerial remuneration.
Regards,
'ASRumour'
*SHARE WITH ALL
0 Comments