Sweat equity shares for non cash consideration require independent valuation, shareholder disclosure and may be treated as managerial remuneration. Issue of sweat equity shares for non cash consideration requires valuation of the intellectual property, know how or other value addition by a valuer who may consult experts; the valuer must submit a justification report sent to shareholders with the general meeting notice, and the company must include its justification in the notice. If shares are issued to a director or manager and the consideration is not an asset recognisable on the balance sheet, the amount shall be treated as part of managerial remuneration.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Sweat equity shares for non cash consideration require independent valuation, shareholder disclosure and may be treated as managerial remuneration.
Issue of sweat equity shares for non cash consideration requires valuation of the intellectual property, know how or other value addition by a valuer who may consult experts; the valuer must submit a justification report sent to shareholders with the general meeting notice, and the company must include its justification in the notice. If shares are issued to a director or manager and the consideration is not an asset recognisable on the balance sheet, the amount shall be treated as part of managerial remuneration.
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