79A. Issue of sweat
equity shares.—(1) Notwithstanding anything
contained in section 79, a company may issue sweat equity
shares of a class of shares already issued if the following
conditions are fulfilled, namely:—
(a) the issue of sweat equity shares is authorised by a special
resolution passed by the company in the general meeting;
(b) the resolution specifies the number of shares, current
market price, consideration, if any, and the class or classes
of directors or employees to whom such equity shares are to
be issued;
(c) not less than one year has, at the date of the issue,
elapsed since the date on which the company was entitled to
commence business;
(d) the sweat equity shares of a company, whose equity shares
are listed on a recognised stock exchange, are issued in accordance
with the regulations made by the Securities and Exchange Board
of India in this behalf:
Provided that in the case of a company whose equity shares
are not listed on any recognised stock exchange, the sweat
equity shares are issued in accordance with the guidelines
as may be prescribed.
Explanation I—For the purposes of this sub-section,
the expression “a company” means the company incorporated,
formed and registered under this Act and includes its subsidiary
company incorporated in a country outside India.
Explanation II—For the purposes of this Act, the expression
“sweat equity shares” means equity shares issued
by the company to employees or directors at a discount or
for consideration other than cash for providing know-how or
making available rights in the nature of intellectual property
rights or value additions, by whatever name called.
(2) All the limitations, restrictions and provisions relating
to equity shares shall be applicable to such sweat equity
shares issued under subsection (1).
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