Sweat Equity Shares As Per Companies Act 2013 Section 54

To Issue a Sweat Equity shares as per Companies Act, Section 54 must be followed. It is as follows:

*54. (1) Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued if the following conditions are fulfilled, namely:—

(a) the issue is authorized 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) Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued.

(d) where the company’s equity shares are listed on a recognized stock exchange, the sweat equity shares are issued in accordance with the regulations made by the Securities and Exchange Board on this behalf. If they are not listed, the sweat equity shares are issued following such rules as may be prescribed.

(2) The rights, limitations, restrictions, and provisions for the time applying to equity shares shall apply to the sweat equity shares issued under this section, and the holders of such shares shall rank pari passu with other equity shareholders.