Question

What are sweat equity shares? what are the conditions for issuing the sweat
equity shares?

05 Aug 2026
Answer :
Word Count : 561
Sweat equity shares are a class of equity shares issued by a company to its directors or employees at a discount or for consideration other than cash. Under the Companies Act, 2013, they are issued in recognition of the contribution made by employees or directors towards the growth, development, intellectual property, or creation of value for the company. The main purpose of sweat equity shares is to reward and motivate persons who contribute significantly to the success of the company and to retain talented employees and directors. Sweat equity shares may be issued for providing know-how, intellectual property rights, or other value additions to the company. They are different from ordinary equity shares because they are generally issued as a reward for the contribution or expertise of eligible employees or directors rather than simply against cash investment. The Companies Act, _______ _____ __________ ______ ______ _________ ________ ___ _______ _________ __________.
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