Comparison Between Sweat Equity Shares and ESOP
Sweat Equity Shares Stock Options Sweat Equity Shares are issued as consideration for creation or transfer of IPRs to the company or as other value addition these can be issued to employees, Officers and Directors of the Company. ESOPs are given in the nature of Incentive and retention plan these can be issued to employees and officers. ESOPs cannot be issued to Promoter or person belonging to the promoter group. Provisions of Companies Act, 1956, SEBI (Issue of Sweat Equity) Regulations, 2002 and Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003 are applicable to Listed and Unlisted companies. Provisions of Companies Act, 1956 and SEBI (ESOS and ESPS) Guidelines, 1999 is applicable to listed companies. These shares can be issued at discounted price or free for know-how and services to the company. These options can be issued with conversion right at a pre determined price. The is...