ISSUE OF SWEAT EQUITY SHARE

Sweat equity share:

                              
                                   Equity share issued to employee or directors at a discount for consideration other than cash for providing know-how or making available right in the nature of intellectual property right or value addition by whatever name called.

  
   A company can issue sweat equity share, of a class of share which have already issued. To issue sweat equity share a company should complied the following condition which are enumerated below:

1.       A special resolution is required to be passed at general meeting.

2.         The resolution should specify the following matter:
       
        i.  number of share.
        ii. current market price.
       iii. consideration, if any.
       iv. classes of employee or directors to whom shares are issued.

3.       At least one year has elapsed from the date on which the company was entitled to commence business.

4.       A listed company has to comply with the regulation issued by SEBI in this regard.

5.       An unlisted company has to comply with the regulation made in this behalf.

LIMITS ON ISSUE OF EQUITY SHARE:

                                                                      the company shall issue sweat equity share 15% of paid-up capital or 5 crore crores whichever is higher in a year  but it does not exceed 20% of the paid-up equity capital of the company at any time.

LOCK IN PERIOD OF SWEAT EQUITY SHARE:

                                                                                   lock in period means the period during which that particular shares shall not be transferred. sweat equity shares shall not be transferred for a period for three years from the date of allotment and it should be stated in share certificate.