Issues of sweat equity shares
Section 54 of the Companies Act, 2013 deals with issues of sweat equity shares. Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely:-- (a) the issue is authorised by a special resolution passed by the company; The Act came into force on 01 Apr 2014.
(1) Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely:--
(a) the issue is authorised by a special resolution passed by the company;
(b) the resolution specifies the number of shares, the current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued;
1* * * * *
(d) where the equity shares of the company are listed on a recognised stock exchange, the sweat equity shares are issued in accordance with the regulations made by the Securities and Exchange Board in this behalf and if they are not so listed, the sweat equity shares are issued in accordance with such rules as may be prescribed.
(2) The rights, limitations, restrictions and provisions as are for the time being applicable to equity shares shall be applicable to the sweat equity shares issued under this section and the holders of such shares shall rank pari passu with other equity shareholders.
Section 54, The Companies Act, 2013 (Act 18 of 2013).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 1
Made under this section, and citing it
4 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Another 3 instruments name this provision in its title or its text without being made under it.
Questions about Section 54
What does Section 54 of the Companies Act deal with?
Section 54 of the Companies Act is headed "Issues of sweat equity shares". Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely:-- (a) the issue is authorised by a special resolution passed by the company;
How do I find court cases under Section 54 of the Companies Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Companies Act 54, section 54 Companies Act, section 54 of the Companies Act. People searching for it also type section 54 of companies act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.
What should I read with Section 54 of the Companies Act, and has it changed?
Its own text turns on section 53 (Prohibition on issue of shares at discount), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it. The rules and notifications made under it are where it actually bites, and there are 4: most recently G.S.R. NO. 43(E) Companies share capital and debentures amendment rules 2023 dated 21.01.2023 (2023), then Commencement notification (2018), and 2 more.
When did Section 54 of the Companies Act come into force?
Section 54 of the Companies Act, cited as Companies Act 54, came into force on 01 Apr 2014, having been enacted on 29 Aug 2013. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions5089 words
- 143. Powers and duties of auditors and auditing standards1867 words
- 230. Power to compromise or make arrangements with creditors and members1432 words
- 232. Merger and amalgamation of companies1416 words
- 149. Company to have Board of Directors1403 words
- 217. Procedure, powers, etc., of inspectors1390 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.