Join our webinar on July 24-25 for an in-depth analysis of Union Budget 2024. Learn about tax proposals, sector impacts, and investment insights. Register now!
Join CA Sachin Jain for a live course on Input Tax Credit from a litigation perspective. Gain practical insights and master ITC complexities. Register now!
A detailed guide to comprehending and navigating the Goods and Services Tax (GST) registration process in India, including eligibility criteria, application procedure, required documentation, and more.
This article offers an in-depth exploration of the Independent Director Data Bank (IDDB) in India, highlighting its purpose, key features, compliance requirements, and consequences of non-compliance.
Article provides a comprehensive understanding of Right to Information Act, discussing its objectives, applicability, process of seeking information, exemptions, appeal mechanisms, and consequences of non-compliance.
his article provides a comprehensive understanding of sweat equity shares, as defined by the Companies Act, 2013, in India. It covers key aspects such as the definition, approval process, valuation, disclosure requirements, restrictions, and tax implications.I. Introduction to Sweat Equity Shares In the realm of corporate finance, sweat equity shares hold a special place. As per the Companies Act, 2013, they represent a type of equity share that a company issues to its directors or employees in recognition of their contributions, skills, or efforts, which often go beyond monetary transactions. II. Defining Sweat Equity Shares Sweat equity shares are those equity shares issued by a company to its directors or employees either at a discount or for considerations other than cash. These shares are often awarded based on the intellectual property rights, technical knowledge, or any form of value addition that the recipient has brought to the company. III. Approval Process for Issuing Sweat Equity Shares The issuance of sweat equity shares isn’t a straightforward process; it requires the approval of the company’s shareholders through a special resolution passed in a general meeting. This resolution should distinctly outline the total number of sweat equity shares to be issued, the category of directors or employees eligible to receive them, the consideration for the shares, and the timeframe within which the shares should be issued. IV. Valuation of Sweat Equity Shares When it comes to sweat equity shares, their valuation is crucial. This must be carried out by a registered valuer who assesses the fair market value of the shares. It’s critical to obtain the valuation report prior to the issuance of the sweat equity shares. V. Lock-in Period and Transferability of Shares Sweat equity shares are subjected to a lock-in period of three years from the date of their allotment. During this period, these shares cannot be transferred or sold by the recipients, ensuring that the awarded individuals remain committed to the company. VI. Disclosure Requirements Transparency is a significant part of the sweat equity shares issuance process. The company is required to disclose the details of the issued sweat equity shares in its annual financial statements. These details encompass the class of directors or employees who received them, the number of shares issued, the rationale for issuing them, and the valuation report. VII. Restrictions and Limitations on Issuing Sweat Equity Shares The Companies Act places certain restrictions and limitations on the issuance of sweat equity shares. For example, a company cannot issue sweat equity shares exceeding 15% of its paid-up share capital in a year, or shares of a value exceeding 25 lakh rupees in any financial year. VIII. Tax Implications of Sweat Equity Shares The issuance of sweat equity shares can carry potential tax implications for both the issuing company and the recipients. Therefore, it is advisable to consult with tax professionals or experts to comprehend these tax implications and comply with the applicable tax laws. In conclusion, issuing sweat equity shares necessitates strict adherence to the provisions of the Companies Act, 2013, and relevant rules or regulations. Companies should ensure that the issue of these shares is done in accordance with the prescribed procedures, approvals, and disclosure requirements, thereby ensuring legal compliance and transparency.
Learn about the Provision for Foreign Liabilities and Assets (FLA) under FEMA 1999 in India. Understand its purpose, applicability, reporting frequency, process, and the information to be reported. Stay compliant to avoid penalties and contribute to a transparent economic landscape.
MCA imposed penalties on CFS Netralaya Private Limited for not holding the minimum number of Board meetings as per the Companies Act, 2013.
CBIC notifies Exchange rate of Turkish Lira for Import & Export wef 08.06.2023 vide Notification No. 40/2023- Customs (N.T.) Dated: 07th June, 2023. Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs ***** Notification No. 40/2023- Customs (N.T.) | Dated: 07th June, 2023 In exercise of the powers […]
Notification No. 36/2023-Income Tax, provides tax exemptions under section 10(23FE) for foreign pension fund – 2743298 Ontario Limited, for eligible investments made in India
Explore the comprehensive guide on Foreign Contribution General Purpose Remittance (FCGPR) in India. Learn about its scope, reporting requirements, role of authorized dealer banks, documentation, and compliance with sectoral caps. Stay informed for smooth foreign capital inflow.
Until a few years ago, homebuyers knew only one way of buying a home — they saved and saved for years and when they had saved enough, they would invest in a home.
