Sweat Equity
Valuation

Sweat equity shares are a special type of shares given by a company to its directors or employees. These shares are offered at a lower price or in return for non-cash contributions like skills, intellectual property, or other valuable inputs.  Sweat Equity Share is defined under Section 2(88) of the Companies Act, 2013. The sweat equity shares mean shares issued by a company to its directors or employees for non-cash consideration or at a discount for making rights available in the nature of intellectual property rights or providing know-hows or any providing any value additions in any form. Rule 8 of Companies (Share Capital and Debentures) Rules, 2014 regulates the procedure of issue of sweat equity shares.