Sweat equity shares can only be issued by a company to its Directors or Employees, at a discount or for a consideration other than cash, for their providing of know-how or creation of intellectual property rights like trademark, patent, copyright or value additions.
Restrictions Pre & Post Issue
A company cannot issue sweat equity shares for more than 15% of the existing paid-up equity share capital in a year or shares of the issue value of Rs. 5 crores, whichever is higher.
Markets regulator Securities and Exchange Board of India (SEBI) has relaxed the quantum of sweat equity that can be issued by new-age technology companies listed on the Innovators Growth Platform (IGP).
‘Sweat equity shares’ are such equity shares, which are issued by a Company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.
Who is eligible for sweat equity?
Who are eligible for Sweat equity Shares? Sweat Equity Shares are issued to the following inside a company: Permanent employee of the company, those are working in India or Outside India (from last one year). Permanent employee of the subsidiary of the company or of a holding company of the company.
Sweat equity shares are directly allotted to the employees or directors at a discount or for consideration other than cash. 1. A permanent employee of the company who is working in India/outside India.
What can a company Cannot issue?
A company cannot issue redeemable preference shares for a period exceeding 20 years. A company may issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue under section 55 of the Companies Act 2013. Was this answer helpful?
What is the limit of shares which can be allotted under sweat equity scheme? A company can allot any number of shares under the Sweat equity shares scheme however, mind the limit upto the Authorised capital of the company including paid up capital of company.
How many days in a year can a public body keep the register of members closed?
Section 154 of the Act provides that the Register of members can be closed for an aggregate period of 45 days in a year but not exceeding 30 days at a time.
Which companies are not eligible to apply for obtaining dormant status?
The company does not have any outstanding statutory taxes, dues, duties etc. payable to the Central Government or any State Government or local authorities etc. The company has not defaulted in the payment of workmen’s dues. The securities of the company are not listed on any stock exchange within or outside India.
What are the statutory registers under Companies Act 2013?
Registers to be maintained under the Companies Act, 2013
- Register of the Company. …
- Register of Members. …
- Register of Directors and Key Managerial Personnel. …
- Register of Charges. …
- Register of Renewed and Duplicate Share Certificates. …
- Register of Employee Stock Options. …
- Register of Shares/Other Securities Bought Back.
What is sweat equity startup?
Key Takeaways. Sweat equity is the unpaid labor employees and cash-strapped entrepreneurs put into a project. Homeowners and real estate investors can use sweat equity to do repairs and maintenance on their own rather than pay for traditional labor.
As per Section 54 of the Companies Act, 2013, a company issue Sweat equity shares to its directors or Employees at a discount or for a consideration, other than cash for providing Know-how or to make available the rights like the intellectual property rights, by whatever name called.