Explain Sweat Equity shares.

Sweat Equity Shares Sweat equity shares can be issued by the company to employees or directors at a discount or for consideration other than cash, for providing know how or making available rights in the nature of intellectual property rights or value additions. Sweat equity share is an instrument permitted to be issued by specified Indian companies, under section 79A of Companies Act, 1956. According to this section a public company may issue sweat equity shares of a class of shares already issued if the following conditions are fulfilled: The issue of sweat equity share is authorised by a special resolution passed by the company in the general meeting. The resolution specifies the number of shares, current market price, consideration if any and the class or classes of directors or employees to whom such equity shares are to be issued. Not less than one year has elapsed at the date of the issue, since the date on which the company was entitled to commence business. The sweat equity shares of a company whose equity shares are listed on a recognised stock exchange are issued in accordance with the regulations made by SEBI in this regard. All the limitations, restrictions and provisions relating to equity shares are also applicable to such sweat equity shares issued under the section 79A.