Receive Daily Updates by Email (Free Subscription)

Section 54 of the Companies Act 2013: Issue of Sweat Equity Shares

SECTION-54 (Issue of sweat equity shares) under CHAPTER-IV (Share Capital and Debentures) of the Companies Act, 2013

(1) Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely:—

(a) the issue is authorised by a special resolution passed by the company;


(b) the resolution specifies the number of shares, the 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 such issue, elapsed since the date on which the company had commenced business; and


(d) where the equity shares of the company are listed on a recognised stock exchange, the sweat equity shares are issued in accordance with the regulations made by the Securities and Exchange Board in this behalf and if they are not so listed, the sweat equity shares are issued in accordance with such rules as may be prescribed.


(2) The rights, limitations, restrictions and provisions as are for the time being applicable to equity shares shall be applicable to the sweat equity shares issued under this section and the holders of such shares shall rank pari passu with other equity shareholders.





Extra Notes for Readers

(1) The Companies Act, 2013 received the assent of the President on the 29th August, 2013 (Published in the Gazette of India, Extraordinary, Part II - Section 1 by Ministry of Law and Justice, Legislative Department on 30th August, 2013) - link


(2) Section 54 of the Companies Act 2013 was notified by MCA Notification S.O. 902(E) dated 26th March 2014 (w.e.f. 1st April 2014) - link

(3) In relation to clause (d) of sub-section (1) of section 54 - refer rule 8 of the Companies (Share Capital and Debentures) Rules, 2014 - link

  • Rule 8 - Issue of sweat equity shares
(4) Exemption to Specified IFSC Public Company - MCA Notification G.S.R. 08(E) dated 4th January, 2017 - link



Serial
Number
Provisions of the Companies    Act,    2013 (18 of 2013)
Exceptions/Modifications/Adaptations
1
Clause (c) of sub-
section (1) of section 54
Shall not apply.

(5) Exemption to Specified IFSC Private Company - MCA Notification G.S.R. 09(E) dated 4th January, 2017 - link



Serial
Number
Provisions of the Companies Act, 2013 (18 of 2013)
Exceptions/Modifications/Adaptations
1
Clause (c) of sub- section (1) of section 54
Shall not apply.




This page was last updated on 7th January, 2017.

No comments:

Post a Comment

Share your valuable opinion or your query here.