Business Studies

The shares issued for providing know how, intellectual property rights, etc are called ____________.


ANSWER

Sweat Equity shares


SOLUTION
Sweat equity shares’ means equity shares issued by a company to its employees or directors at a discount (to the market price) or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.

According to Section 54, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled,

The issue is authorized by a special resolution passed by the company;
The resolution specifies the number of shares, the current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued;
At least one year should have elapsed, at the date of such issue, since the date on which the company had commenced business; and
Where the equity shares of the company are listed on a recognized stock exchange, the sweat equity shares should be issued in accordance with the regulations made by Securities and Exchange Board in this behalf and if they are not so listed, the sweat equity shares are issued in accordance with such rules as may be prescribed.
The rights, limitations, restrictions and provisions which are applicable to equity shares shall he applicable to the sweat equity shares issued under this section and the holder of such shares shall rank with other equity shareholders.
View Answers

You're just one step away

Create your Digital Resume For FREE on your name's sub domain "yourname.wcard.io". Register Here!


Single Correct Medium Published on 18th 08, 2020
Next Question
Questions 244531
Subjects 8
Chapters 125
Enrolled Students 201
Enroll Now For FREE

Realted Questions

Q1 Subjective Medium
State the features of sole trading concern.

Asked in: Business Studies - Sources of Business Finance


1 Verified Answer | Published on 18th 08, 2020

View Answer
Q2 Single Correct Medium
___________ debentures are which create a charge on the assets of the company, thereby mortgaging the assets of the company.
  • A. Registered
  • B. Bearer
  • C. Secured
  • D. Unsecured

Asked in: Business Studies - Sources of Business Finance


1 Verified Answer | Published on 18th 08, 2020

View Answer
Q3 Single Correct Medium
Retained earnings is a ___________ source of funds available to an organisation.
  • A. Temporary
  • B. Permanent
  • C. Higher
  • D. Both a and b

Asked in: Business Studies - Sources of Business Finance


1 Verified Answer | Published on 18th 08, 2020

View Answer
Q4 Subjective Medium
Select the proper option from the options given below and rewrite the sentence:
Perishable goods are stored in_________.

Asked in: Business Studies - Sources of Business Finance


1 Verified Answer | Published on 18th 08, 2020

View Answer
Q5 Single Correct Medium
The shares of a company are________. 
  • A. non-transferable
  • B. fixed
  • C. none of the above
  • D. transferable

Asked in: Business Studies - Sources of Business Finance


1 Verified Answer | Published on 18th 08, 2020

View Answer