SWEAT EQUITY SHARES: A REWARD FOR CONTRIBUTIONS, Sweat equity shares are a form of compensation given by a company to its employees, directors, or consultants in exchange for their contribution, usually in the form of services or intellectual property, rather than cash. Here's a detailed description of sweat equity shares

1. SWEAT EQUITY
SHARES: A
REWARD FOR
CONTRIBUTIONS

2. SWEAT EQUITY SHARES ARE EQUITY SHARES
ISSUED BY A COMPANY TO ITS DIRECTORS OR
EMPLOYEES AT A DISCOUNT OR FOR
CONSIDERATION OTHER THAN CASH.
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3. THESE SHARES SERVE AS A REWARD FOR THE
SIGNIFICANT CONTRIBUTIONS OF DIRECTORS
OR EMPLOYEES IN TERMS OF LABOR,
EXPERTISE, OR INTELLECTUAL PROPERTY.

4. For instance, a software engineer in a technology-
based company might receive Sweat Equity Shares
for developing crucial AI software.

5. According to the Companies Act, 2013, a
company can issue a higher of
•15% of its existing Paid-up Share Capital or
•₹ 5 crores as Sweat equity Shares.
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6. However, the value of these shares should not
exceed 25% of the paid-up equity capital of
the company at any given time.
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7. ELIGIBLE RECIPIENTS:
* PERMANENT EMPLOYEES OF THE COMPANY, ITS
SUBSIDIARY, OR HOLDING COMPANY.
* DIRECTORS OF THE COMPANY.
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8. These shares are non-transferable for 3 years and
must be allotted by the company within 1 year from the
date of passing the special resolution.
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9. • The company must maintain a sweat equity share register in Form
SH-3.
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10. THANK YOU
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