Issue of sweat equity shares (very urgent)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 December 2012 Please provide the format of EGM notice and explantory statement for issue of sweat equity shares and aslo agreement/ contract format.

Kindly do the needful.

Ajay Mishra

Ajay Mishra (Expert)
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06 December 2012 Hi

Board resolution for issuance of sweat equity shares
RESOLVED THAT subject to the authorisation by the company in general meeting and subject to the provisions of section 79A of the Companies Act, 1956 and the Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003, ........ number of equity of shares of Rs. ..... be and are hereby issued at a discount of Rs. ..... per share (or for consideration other than cash for providing know-how or making available rights in the nature of intellectual rights or value additions, by whatever name called) ........... to ........ number of employees including some directors, as per the statement placed before the Board duly initialed by the Chairman for identification.
RESOLVED FURTHER THAT an Extraordinary General Meeting of the company be called and held at ...... on ....... day of ........... at ...... for obtaining the approval of the members for issue of the aforesaid shares (called Sweat Equity Shares) as per the draft notice and explanatory statement placed before the meeting duly initialed by the Chairman for identification.
RESOLVED FURTHER THAT the Company Secretary be and is hereby authorised to issue the said notice to the members and others who are entitled for the same, and take all necessary action in this respect.

Ajay Mishra

Ajay Mishra (Expert)
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06 December 2012
General meeting resolution for issuance of sweat equity shares

RESOLVED THAT pursuant to section 79A, the Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003 and other applicable provisions, if any, of the Companies Act, 1956 and in accordance with Articles of Association of the company, consent of the company be and is hereby accorded to the Board of directors of the company for issue of ........... Sweat Equity Shares at Rs. ......... per share (Market price Rs. ....... as on ........) (or for consideration other than cash for providing know-how or making available rights in the nature of intellectual rights or value additions, by whatever name called) to the employees and directors of the company as specified below. [give details of class of employees/directors to whom the shares are to be issued and the consideration for issue of such shares]
RESOLVED FURTHER THAT the Board of directors while issuing the said Sweat Equity Shares do ensure compliance with the guidelines prescribed by the Central Government.
RESOLVED FURTHER THAT the Board of directors do take all necessary actions in this respect to give effect to this Resolution.
Explanatory statement
Section 79A of the Companies Act, 1956 and the Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003 authorises a company to issue Sweat Equity Shares to its employees and directors. This is to enable to help the companies to reward their employees who have contributed for the growth and making available rights in the nature (intellectual property rights or value additions, by whatever name called).
The Board of directors has accordingly decided to issue such shares to the following class of employees/directors for their contribution to the company [give details] ...............
The company has complied with the conditions specified in section 79A of the Companies Act, 1956 and the Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003.
Your directors recommend to pass the special resolution as set out in the notice of the meeting.
Shri ............., Shri ................ and Shri .........., directors are concerned or interested in this resolution in respect of the Sweat Equity Shares that may be issued to them. No other director is interested or concerned in this resolution.
Appendix 4

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