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CS Executive · Capital Market and Securities Laws · Share Based Employee Benefits and Sweat Equity

Arvind Pharma Ltd passes a special resolution to issue sweat equity shares to its senior employees. According to Section 54(1)(b), which of the following must the resolution specify?

The special resolution must specify the number of shares, the current market price, the consideration if any, and the class or classes of directors or employees who will receive the shares. This is the content required by Section 54(1)(b) of the Companies Act, 2013.

  1. AOnly the total amount to be raised and the date of allotment
  2. BThe number of shares, the current market price, consideration if any, and the class or classes of directors or employees to whom shares are issuedCorrect
  3. COnly the names of the individual employees and their salaries
  4. DThe auditor's valuation report and the company's net worth for the last five years

Explanation

Section 54(1)(b) requires the resolution to specify the number of shares, the current market price, the consideration, if any, and the class or classes of directors or employees. Naming individuals with salaries or a net worth history is not what the clause lists.

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