Sweat equity shares are issued by a company to its directors or employees for:
AA discount or non-cash consideration in return for know-how, IP or value additions
BCash subscription at par
CAllotment in lieu of unpaid dividend
DMandatory buy-back
Answer & Solution
Correct answer: A. A discount or non-cash consideration in return for know-how, IP or value additions
1. Section 2(88) defines sweat equity as shares issued at a discount or for non-cash consideration for know-how, IP or value additions.
2. Such issue requires a special resolution and post-issue lock-in.
3. Hence (B).
_Source: ICAI BoS CA Inter Paper 2 — Share Capital and Debentures_