The share capital of Raney Ltd. is ₹30 crore. 'Russel' is appointed as the managing director of the company, the company wants to compensate him by issue of shares for supplying technical know-how without any cost. In th
CS Executive · Company Law · PYQS · December 2019
The share capital of Raney Ltd. is ₹30 crore. 'Russel' is appointed as the managing director of the company, the company wants to compensate him by issue of shares for supplying technical know-how without any cost. In this context, answer the following: Is approval of shareholders required for issuing such shares ?
Answer & Explanation:
Yes, Rule 8(1) of Companies (Share capital and Debentures) Rules, 2014 states the special resolution shall be passed authorizing the issue of sweat equity shares and shall be valid for making the allotment within a period of not more than twelve months from the date of passing of the special resolution.
Topics: Company Law
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