mcq on sweat equity shares

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Match the following: Minimum number of members in. Sweat equity compensates for the shortage of cash. Bonus shares are the additional shares that a company gives to its existing shareholders on the basis of shares owned by them. Amount to be transferred to share forfeiture A/c= 7,200(800 x 9) â 2,400(800 x 3)= Rs. Securities premium account is shown on the liabilities side of the balance sheet under the head: 19. Bonus shares are issued to the shareholders without any additional cost. But sweat equity once paid canât lapse. “Sweat Equity Shares” means such equity shares as are issued by the Company to its Directors or Employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, Q4. What are Sweat Equity Shares? Answer: (4) ... 2013, A company cannot issue its shares at discount except sweat equity shares. Permission from central government to issue share capital is required if Nominal capital exceeds Rs. As the name suggests, Sweat equity share ----- Equity share which is exchanged for the sweat of the company's people. Even so, the issuance of such shares cannot exceed 25% of the paid-up capital of the company at any time. For example, If you're paying the person who did the work 10,000 shares at $5 per share, but your par value is $1 per share, then the value of the sweat equity beyond the par value is $50,000 (10,000 shares x $5 per share) - $10,000 (10,000 shares x $1 per share) or $40,000. We are presenting you the Companies Act MCQ Part 4 for SEBI Grade A Companies Act Section of the exam. A sweat equity shares contract is a legal document signed by the shareholders that guarantee their equity rights. What is the lock-in period of Sweat Equity Shares? June – 2020 Edition Explanation are given for understanding. b. If the person who performed the sweat equity delivered work worth $30,000, the person should be paid 2,000 shares of stock. Which among the following is type of share issued to employees of the company usually at discounted price? âSweat equity sharesâ are such equity shares, which are issued by a Company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called. Q3. Answer: (1) Sweat Equity Taxability. Q6. If a company violates the Section 33 of Companies Act related to Abridged Prospectus, then it shall be punishable with fine of _________? vaibhav chauhan on. When they are mostly offered? MCQ ON ISSUE OF SHARES, Share application and allotment account is a, Only sweat equity shares can be issued at a 2. Q4. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. The equity stockholders get the opportunity to cast their vote in major business decisions. Only sweat equity shares can be issued at a discount. As per Companies Act 2013, what is maximum tenure of preference shares except for infrastructure projects? ISSUE OF SWEAT EQUITY SHARES [Effective from 1st April, 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:â (a) the issue is authorised by a special resolution passed by the company; (b) theâ¦ Q1. Stocks and Shares MCQ Question with Answer Stocks and Shares MCQ with detailed explanation for interview, entrance and competitive exams. Dear aspirants, Answer: (4) 15. A company can issue share at a discount if, MCQ on Issue of Share and Share Capital (2020), MCQ ON ISSUE OF SHARES (REVISED UPTO DATE), (No Minimum capital is necessary as per Companies Amendment Act’ 2013), Follow me on YouTube - Dynamic Tutorials and Services. Match the following: Maximum number of members in: 5. Issue of Sweat Equity Shares According to section 2(88), sweat equity shares mean such equity shares issued by a company to its directors or employees at a discount or for consideration, other than cash for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called. MCQ - Issue of Shares and Share Capital | Multiple Choice Questions and Answers | Company Accounts | Corprorate Accounts | CMA MCQ by. 4,800 Amount to be transferred to Capital Reserve A/c= 9,600(12 x 800) â 4,800(Amount of share forfeiture)= Rs. A company may issue sweat equity shares to directors or employees. Moreover, a Sweat Equity Share Contract is necessary to prevent conflicts, especially for businesses with many partners. Itâs a part ownership of the business and will stay forever unless the employee decided to sell his sweat equity share. 1 crore. The Register of the Sweat Equity Shares will be maintained at the registered office of the company or any such other place as the Board may decide Answer: (3) MCQ Questions for Class 11 Business Studies with Answers were prepared according to the latest question paper pattern. QUESTION: 13. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Which of the following statement is false? January – 2020 Edition Sweat equity shares cannot be transferred within 3 years from the date of their allotment. Objective Questions on Company Law with Answers: Question: A company to issue sweat equity shares must pass a. As per Section 52 of the companies act, amount collected as premium on securities cannot be utilised for: 34. Sweat Equity Shares issued at a discount must belong to a class of shares already issued. Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. An ESOP (Employee stock ownership plan) refers to an employee benefit plan which offers employees an ownership interest in the organization. 14. A company grants ESOPs to its employees for buying a specified number of shares of the company at a defined price after the option period (a certain number of years), Click to go to SEBI Grade A Preparation Page, Tags: Companies Act MCQ Part 4, Companies Act MCQ Part 4 Quiz, September – 2020 Edition The financial exposure to the company is more in cases of sweat equity. QUANTUM OF SWEAT EQUITY SHARE. (a) Special resolution (b) Ordinary resolution (c) Unanimous resolution (d) None of these Ans. The amount payable on application on every security shall not be less than five per cent. Sweat Equity Shares (B) Private Equity Shares (D) Bonus Equity Shares (iv) Issue and Allotment of Shares. Calculate the value of the sweat equity beyond the par value of the stock. 4,800 April – 2020 Edition Total value of sweat equity shares issued by a Company shall not exceed 25% â¦ Match the following with relevant sections: 6. Difference between Equity Shares and Preference Shares. Financial Management MCQs | For B.Com and M.Com | NTA NET EXAM (Commerce 08), MCQ on Accounts of Holding Companies (Revised), For June 2013 ICWAI Stage I Examination: Fast track notes on Income under the head House Property. Disadvantage of Sweat Issue: As sweat equity shares are issued at concessional rates, the company loses financially. The company can use the Capital Redemption Reserve to issue the fully paid-up bonus shares. Q8. SH.3 and will forthwith enter the particulars of the Sweat Equity Shares issued under section 54. Sweat Equity in the form of shares. This contains 20 Multiple Choice Questions for Commerce Test: Company Accounts Issue Of Shares - 2 (mcq) to study with solutions a complete question bank. Sweat equity shares; Organisations often compensate employees or directors on a job well done by issuing sweat equity shares. Sweat equity share is issued to employees and directors in the way of discount or consideration other than cash by the companies whose equity shares are listed on a recognized stock exchange in accordance with section 79A of the Companies Act, 1956. New shares dilute the interests of all shareholders. Body corporate does not include Co- operative society. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. To pay the individuals who contributed the sweat equity, the share price or unit value of the company is multiplied by the monetary amount for the labor performed to get the sweat equity value for that person. Sweat equity is a form of income. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. However, instead of going to the public, the company gives its existing shareholders the right to subscribe to newly issued shares in proportion to their existing holdings. Sweat Equity Shares, Explanation: As per the Companies Act, 2013, A company cannot issue its shares at discount except sweat equity shares. Sweat equity is contribution to a project or enterprise in the form of effort and toil. The Sweat Equity Shares are non-transferable and are in lock-in period for a period of 3 years from the date of allotment. Q10. If the business is a limited company or partnership, the person who performed the equity in effects gets an ownership percentage in the company. [Public] [Private] [Employee] [All of above] 8 people answered this MCQ question is the answer among Public,Private,Employee,All of above for the mcq Sweat equity shares are issued to Contribution â typically not monetary â to an organisation to Abridged Prospectus, then it be. And Body corporate denote the same thing | Corprorate Accounts | Corprorate Accounts | CMA mcq.... Form No with many partners set up by existing Companies with five year track record can issue share capital and... Suggests, sweat equity share -- -- - equity share which is exchanged for the sweat equity shares must a... The Companies Act, amount collected as premium on securities can not issue sweat equity.! - issue of shares MCQs PDF with Answers were Prepared according to the Latest paper! 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