Sweat Equity Shares by Private Company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 May 2010 As per the Unlisted Companies(Issue of Sweat Equity Shares) Rules, whether it is required to provide the explanatory statement while passing the Special Resolution though the AoA of Pvt Company does not require the explanatory statement i.e, a clause which states Sec 173 of Companies Act, 1956 does not apply.

And please let me know what is meant by Lock-in of sweat equity shares?

Ankur Garg

Ankur Garg (Expert)
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05 May 2010 Special resolution is required in your case and this is a special business read with section 173.

For every special business explanatory statement is 100% required irrespective of the status of company.

Lock-in means after allotment of the shares the concerned allottee can not sell the shares for a fixed period or for a period shares are under lock-in.

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