Issue of sweat equity shares
(1)
Notwithstanding anything contained in section 53section 53, a company may issue sweat equity sharessweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely:—
(a)
the issue is authorised by a special resolution passed by the company;
(b)
the resolution specifies the number of shares, the current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued;
(c)
not less than one year has, at the date of such issue, elapsed since the date on which the company had commenced business; and
(d)
where the equity shares of the company are listed on a recognised stock exchangerecognised stock exchange , the sweat equity shares are issued in accordance with the regulations made by the Securities and Exchange BoardSecurities and Exchange Board in this behalf and if they are not so listed, the sweat equity shares are issued in accordance with such rules as may be prescribed.
(2)
The rights, limitations, restrictions and provisions as are for the time being applicable to equity shares shall be applicable to the sweat equity shares issued under this section and the holders of such shares shall rank pari passu with other equity shareholders.
Notes, amendments & references (4)
(c) Omitted vide Companies (Amendment) Act, 2017 dated 03.01.2018, effective from 07.05.2018. To view commencement notification, Click Here
To view the notification of Companies Amendment Act,2017 Click Here
This clause shall not apply for IFSC Private and IFSC Public company vide GSR 8(E)and GSR 9(E) dated 04.01.2017.To view the notification Click Here
Refer rule 8 of the Companies (Share Capital and Debentures) Rules, 2014. To view the rule, Click Here