The Board of directors of Vijay Ltd., a listed entity proposes to issue sweat equity shares to Ganesh, an employee belonging to the promoter's group. Ganesh also participated in the Shareholders' resolution for allotment

A company whose equity shares are listed on a recognised stock exchange may issue sweat equity shares in accordance with Section 54 of the Companies Act, 2013 and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 to its employees for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called. Key provisions: A company shall not issue sweat equity shares for more than fifteen percent of the existing paid up equity share capital in a year. The issuance of sweat equity shares in the company shall not exceed twenty five percent of the paid up equity share capital of the company at any time. For passing a special resolution under clause (a) of sub-section (1) of section 54 of the Companies Act, 2013, the explanatory statement to be annexed to the notice for the general meeting pursuant to section 102 of the Companies Act, 2013 shall contain disclosures as specified in Schedule - II of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. Each issue of sweat equity shares shall be voted by a separate resolution. The resolution for issue of sweat equity shares shall be valid for a period of not more than twelve months from the date of passing of the resolution.