The correct answer is: A. special resolution
Sweat equity shares are shares issued by a company to its employees or directors in consideration of their past or future services. They are issued at a discount to the market price of the company’s shares.
Sweat equity shares can be issued by a company only with the approval of its shareholders by a special resolution. A special resolution is a resolution passed by a majority of at least 75% of the votes cast at a general meeting of the shareholders.
The company must also obtain the approval of the National Company Law Tribunal (NCLT) before issuing sweat equity shares. The NCLT is a quasi-judicial body that is responsible for overseeing the affairs of companies in India.
The NCLT will consider the following factors before approving the issue of sweat equity shares:
- The purpose for which the sweat equity shares are being issued
- The number of shares to be issued
- The discount at which the shares are being issued
- The terms and conditions of the issue
If the NCLT is satisfied that the issue of sweat equity shares is in the best interests of the company, it will approve the issue.
The issue of sweat equity shares can be a useful tool for companies to attract and retain talented employees. It can also be used to motivate employees to achieve certain goals. However, it is important to note that sweat equity shares are a complex issue and should only be issued after careful consideration.
Here is a brief explanation of each option:
A. special resolution
A special resolution is a resolution passed by a majority of at least 75% of the votes cast at a general meeting of the shareholders.B. special resolution and sanction from NCLT
The company must also obtain the approval of the National Company Law Tribunal (NCLT) before issuing sweat equity shares. The NCLT is a quasi-judicial body that is responsible for overseeing the affairs of companies in India.C. ordinary resolution and sanction from NCLT
An ordinary resolution is a resolution passed by a majority of votes cast at a general meeting of the shareholders. Sweat equity shares cannot be issued by an ordinary resolution.D. none of the above
Sweat equity shares can only be issued by a special resolution.