Sweat equity shares issuance: valuation, mandatory disclosures, issuance limits, three-year lock-in and accounting treatment required. These Rules govern issuance of sweat equity shares by unlisted companies, requiring shareholder approval by special resolution with an explanatory statement detailing board approval, justification, number and class of shares, valuation basis, recipient identities, impact on managerial remuneration, and diluted EPS. Pricing must be by an independent valuer; non-cash consideration requires a valuation report and justification, with specified accounting treatment and possible classification as managerial remuneration where non-capitalisable and issued to directors or managers. Issuance limits, a three-year lock-in, register maintenance, auditor certification, and prescribed disclosures are required.
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.
These Rules govern issuance of sweat equity shares by unlisted companies, requiring shareholder approval by special resolution with an explanatory statement detailing board approval, justification, number and class of shares, valuation basis, recipient identities, impact on managerial remuneration, and diluted EPS. Pricing must be by an independent valuer; non-cash consideration requires a valuation report and justification, with specified accounting treatment and possible classification as managerial remuneration where non-capitalisable and issued to directors or managers. Issuance limits, a three-year lock-in, register maintenance, auditor certification, and prescribed disclosures are required.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
