Question
For issuing sweat equity shares, which of the following
statements accurately reflects the conditions that must be fulfilled?Solution
Companies Act Section 54. Issue of sweat equity shares: (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 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; (d) where the equity shares of the company are listed on a recognised stock exchange , the sweat equity shares are issued in accordance with the regulations made by the Securities 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.Â
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