Question

why is sweat equity shares issued at a discount​

Answer 1

• Sweat Equity” shares mean equity shares issued by a company to its employees or directors at a discount or for consideration other than cash.

• The issuing of “sweat equity” allows the company to attract and retain its employees by rewarding them for their contribution.

Answer 2

Question:-

why is sweat equity shares issued at a discount

Answer:-

• 7uunder sec 53(1) of the companies act of 2013 a company cannot issue shares discount, if any share issued by the company at a discounted price shall be void.

• however , section 54 , a company may issue sweat equity shares of a class of shares already issued , if the following conditions fulfilled by the act  

• therefore , only sweat equity shares can be issued at discount under sec 54.

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sweat equity share definition

Sweat equity share are such equity share are issued by a company to its directors or employees at a discount or for consideration , other than cash , for providing their know-how

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