Sweat equity shares issuance requires a special resolution and regulatory compliance, with holders ranking pari passu with equity shareholders. Issuance of sweat equity shares is authorised only by a special resolution specifying number, current market price, consideration, and recipient classes; the company must have commenced business at least one year prior; listed companies must follow Securities and Exchange Board regulations and unlisted companies must follow prescribed rules. Such sweat equity shares carry the same rights, limitations and restrictions as existing equity shares and their holders rank pari passu with other equity shareholders.