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CS Professional · Strategic Management and Corporate Finance · Raising of Funds from Equity and Procedural Aspects - Public Funding

Under the Companies Act, 2013 as given, a company issuing sweat equity shares which are listed on a recognised stock exchange must comply with which requirement?

A company issuing sweat equity shares that are listed must have the issue authorised by a special resolution and must issue them in accordance with SEBI regulations. Government-prescribed rules apply only where the shares are not listed on a recognised stock exchange.

  1. AIssue only by ordinary resolution with no SEBI regulations applying
  2. BIssue in accordance with the regulations made by SEBI, besides authorisation by a special resolutionCorrect
  3. CIssue in accordance with rules prescribed by the Central Government only
  4. DIssue only to shareholders, not to directors or employees

Explanation

The Act requires authorisation by special resolution and, where the shares are listed, issue in accordance with SEBI regulations. Prescribed rules apply to unlisted companies. The resolution can specify classes of directors or employees as recipients, so option D is wrong.

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