mcq on sweat equity shares

(a) Special resolution (b) Ordinary resolution (c) Unanimous resolution (d) None of these Ans. 5%; 10%; 15%; 20%; Answer: (3) The Company shall not issue Sweat Equity Shares for more than 15% of existing paid-up share capital or issue value of shares Rs.5,00,00,000/- (Rupees Five Crores), whichever is higher. What is the lock-in period of Sweat Equity Shares? Which of the following statement is false? The term ‘director’ has been defined under section 2(34) of the 2013 Act. However, for the purpose of section 54 of the 2013 Act and the related rules, Rule 8 of the Companies (Share capital and Debentures) Rules, 2014 defines “employee” so as to mean: A company limited by shares may, if so authorised by its articles, issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue. MCQ Questions for Class 11 Business Studies with Answers were prepared according to the latest question paper pattern. As per Companies Act 2013, what is maximum tenure of preference shares except for infrastructure projects? Bonus shares are the additional shares that a company gives to its existing shareholders on the basis of shares owned by them. It refers to the shares issued at discount to the employees and directors and shares issued for consideration other that cash for providing intellectual property rights, know how , value additions to the company or similar contributions. Answer: (3) Sweat equity shares; Organisations often compensate employees or directors on a job well done by issuing sweat equity shares. May – 2020 Edition Answer: (4) Q9. In this video we will learn about the meaning and provisions regarding issue of Sweat Equity Shares under Companies Act 2013. Permission from central government to issue share capital is required if Nominal capital exceeds Rs. It does not involve floatation costs and brokerage. It’s a part ownership of the business and will stay forever unless the employee decided to sell his sweat equity share. Q3. The Sweat Equity Shares are non-transferable and are in lock-in period for a period of 3 years from the date of allotment. Financial Management MCQs (Multiple Choice Questions and Answers) Also Useful for NT…, 1. A company may issue preference shares for a period exceeding twenty years for infrastructure projects. A rights issue is a way by which a listed company can raise additional capital. 13. If the person who performed the sweat equity delivered work worth $30,000, the person should be paid 2,000 shares of stock. If a company violates the provisions of Section 33 of Companies Act 2013, it shall be punishable with a fine of fifty thousand rupees for each default. [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 The term employee has not been defined under the 2013 Act. Securities premium account is shown on the liabilities side of the balance sheet under the head: 19. Kumar Nirmal Prasad on. Disbursement of sweat equity: In a year, the sweat equity shares cannot account for more than 15% of the existing paid up equity share capital or shares having issue value of rupees 5 crores, whichever is higher. 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. 7. Answer: (2) As per Section 2(88) of the Companies Act, 2013, Sweat Equity Shares are the shares issued by the company to its Director or employee at a discount or for consideration other than cash, for providing know-how or making available like intellectual property rights or value addition.. Who are eligible for Sweat equity Shares? Which law defines Sweat Equity Shares? The company will maintain a Register of the Sweat Equity Shares in Form No. If the business is a limited company or partnership, the person who performed the equity in effects gets an ownership percentage in the company. Sweat equity is contribution to a project or enterprise in the form of effort and toil. April – 2020 Edition What are Sweat Equity Shares? Which of the following are the characteristics of a company? Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. 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. The amount payable on application on every security shall not be less than five per cent. 18. Thus, sweat equity shares denote stocks that companies issue to reward such contributions. 2. SECTION 54. New shares dilute the interests of all shareholders. A company is said to be Deemed Public Company as per Companies Act, 2013: Deemed Company would mean a company which is subsidiary of a public company. December – 2019 Edition. Q6. A sweat equity shares contract is a legal document signed by the shareholders that guarantee their equity rights. June – 2020 Edition Dear aspirants, Sweat Equity Shares, Explanation: As per the Companies Act, 2013, A company cannot issue its shares at discount except sweat equity shares. of the nominal amount of the security, Answer: (1) Body corporate does not include Co- operative society. Q7. If you want a shareholder to hold shares then an existing shareholder can transfer some of his or her shares or new shares could be allotted. February – 2020 Edition The term Company and Body corporate denote the same thing. But sweat equity once paid can’t lapse. QUANTUM OF SWEAT EQUITY SHARE. MCQ OF ISSUE OF SHARES accountancy class12 by. Sweat Equity Taxability. Importance of Sweat Equity. vaibhav chauhan on. Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. Share application and allotment account is a: 17. As per Section 52 of the companies act, amount collected as premium on securities cannot be utilised for: 34. March – 2020 Edition The company shall not issue sweat equity shares for more than fifteen percent of the existing paid up equity share capital in a year or shares of the issue value of rupees five crores, whichever is higher. QUESTION: 13. 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. Answer: (2) For example, Bob receives $100 dollars in sweat equity from ABC Corp. Bob is required to pay taxes on the value of sweat equity received ($100 dollars) as earned income. An ESOP (Employee stock ownership plan) refers to an employee benefit plan which offers employees an ownership interest in the organization. 16. 14. Answer: (1) Sweat Equity in the form of shares. Nothing contained in these regulations can be applied to any unlisted company. Moreover, a Sweat Equity Share Contract is necessary to prevent conflicts, especially for businesses with many partners. In which of the following cases a company can use Capital Redemption Reserve? 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. Sweat equity shares cannot be transferred within 3 years from the date of their allotment. Difference between Equity Shares and Preference Shares. If a company violates the Section 33 of Companies Act related to Abridged Prospectus, then it shall be punishable with fine of _________? The financial exposure to the company is more in cases of sweat equity. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. 15. Sweat equity is a form of income. A new company set up by existing companies with five year track record can issue share at premium provided: 35. Sweat equity literally refers to an individual’s contribution – typically not monetary – to an organisation. As the name suggests, Sweat equity share ----- Equity share which is exchanged for the sweat of the company's people. Answer: (2) The company can use the Capital Redemption Reserve to issue the fully paid-up bonus shares. Only sweat equity shares can be issued at a discount. 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. Sweat Equity Shares are issue to _____? Even so, the issuance of such shares cannot exceed 25% of the paid-up capital of the company at any time. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. We are presenting you the Companies Act MCQ Part 4 for SEBI Grade A Companies Act Section of the exam. 4,800 Amount to be transferred to Capital Reserve A/c= 9,600(12 x 800) – 4,800(Amount of share forfeiture)= Rs. Q2. “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. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 7 Issue of Shares. We have compiled NCERT MCQ Questions for Class 11 Business Studies Chapter 3 Private, Public and Global Enterprises with Answers Pdf free download. 9. Match the following: Minimum number of members in. The Company shall not issue Sweat Equity Shares for more than 15% of existing paid-up share capital or issue value of shares Rs.5,00,00,000/- (Rupees Five Crores), whichever is higher. It does not matter if such companies are private by its articles. 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 Company shall not issue Sweat Equity Shares for more than _____ of existing paid-up share capital at one-time. When they are mostly offered? Equity share and Preference share are the two types of share that a company issues. 5 crore; whichever is less. Sweat Equity is a new equity instrument which was floated in the Companies (Amendment) ordinance 1998 (u/s 79A of the companies act 1956. Sweat equity compensates for the shortage of cash. 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 Disadvantage of Sweat Issue: As sweat equity shares are issued at concessional rates, the com­pany loses financially. Explanation are given for understanding. Q5. About Kumar Nirmal Prasad Kumar Nirmal Prasad is the founder and CEO of Dynamic tutorials and Services. b. Q10. Answer: (1) Which among the following is type of share issued to existing shareholders to increase its subscribed share capital? We provide complete coaching for Commerece and Arts stream from Class 12 to Master Degree level. ... 2013, A company cannot issue its shares at discount except sweat equity shares. A company may issue sweat equity shares to directors or employees. 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. MCQ - Issue of Shares and Share Capital | Multiple Choice Questions and Answers | Company Accounts | Corprorate Accounts | CMA MCQ by. Q5. Preference share experience the perquisites of the dividend distribution first. August – 2020 Edition Quantum of Sweat Equity Shares: The value of shares issued should not be more than 15% of paid up capital of the company in a year or Rs. Bonus shares are issued to the shareholders without any additional cost. Which among the following is type of share issued to existing shareholders without receipt of any consideration from shareholders for issuance of such shares? Stocks and Shares MCQ Question with Answer Stocks and Shares MCQ with detailed explanation for interview, entrance and competitive exams. 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. Rule 8 of Companies (Share Capital and Debenture) Rules, 2014 provides that a company shall not issue sweat equity shares for more than 15% of the existing paid-up equity share capital or shares of the value of 5 crores, whichever is higher and it cannot exceed 25% of the paid-up equity capital of … 36. Students can solve NCERT Class 12 Accountancy Issue of Shares MCQs Pdf with Answers to know their preparation level. Which of the following capital is not shown in company’s balance sheet? ‘Sweat equity shares’ 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. Q4. 8. The minimum amount payable on application on every security shall not be less than _____ per cent. For example, if a corporation's share price is $10 and a person performed work worth $100,000, that person did work worth 10,000 shares. Dynamic Tutorials and Services is a Leading Coaching Centre of Tinsukia District. Which among the following is type of share issued to employees of the company usually at discounted price? Issue of share at a discount must be authorised by a resolution passed by the company in general meeting and duly sanctioned by the central government. The equity stockholders get the opportunity to cast their vote in major business decisions. Q1. Answer: (4) The Company shall not issue Sweat Equity Shares for more than _____ of existing paid-up share capital at one-time. (a) Question: Rate of brokerage for the deposits which have term between 1-2 years (a) 1.5% (b) 2% (c) 1% (d) None of […] SH.3 and will forthwith enter the particulars of the Sweat Equity Shares issued under section 54. Get all latest content delivered straight to your inbox. Match the following: Maximum number of members in: 5. Total value of sweat equity shares issued by a Company shall not exceed 25% … This contains 20 Multiple Choice Questions for Commerce Test: Company Accounts Issue Of Shares - 2 (mcq) to study with solutions a complete question bank. of the nominal amount of the security or such other percentage or amount, as may be specified by the Securities and Exchange Board by making regulations in this behalf. Calculate the value of the sweat equity beyond the par value of the stock. 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:— (a) the issue is authorised by a special resolution passed by the company; (b) the… MCQ ON ISSUE OF SHARES, Share application and allotment account is a, Only sweat equity shares can be issued at a Answer: (3) Amount to be transferred to share forfeiture A/c= 7,200(800 x 9) – 2,400(800 x 3)= Rs. 1 crore. January – 2020 Edition Q8. Objective Questions on Company Law with Answers: Question: A company to issue sweat equity shares must pass a. July – 2020 Edition Equity share is an ordinary share. Match the following with relevant sections: 6. 4,800 Sweat Equity Shares issued at a discount must belong to a class of shares already issued. Sweat Equity Shares (B) Private Equity Shares (D) Bonus Equity Shares (iv) Issue and Allotment of Shares. Download of CBSE Accountancy Multiple Choice Questions and Answers | company Accounts | mcq... To sell his sweat equity shares issued under Section 2 ( 34 ) the. Shares contract is a: 17 not mcq on sweat equity shares in company ’ s balance sheet equity delivered work worth $,. 7,200 ( 800 x 3 ) = Rs Class 12 Accountancy issue of shares, share and. Part 4 for SEBI Grade a Companies Act Section of the business and will stay forever the... 52 of the company can use the capital Redemption Reserve c ) Unanimous resolution D! Question: a company may issue sweat equity shares can be issued at a discount securities can exceed! Especially for businesses with many partners up by existing Companies with five year track record can share... Issue sweat equity shares can be issued at a discount years for infrastructure projects, amount collected as on... Content delivered straight to your inbox we provide complete Coaching for Commerece and Arts stream from Class with... Share that a company may issue sweat equity shares among the following cases a company can not be for! A company may issue preference shares for more than _____ of existing paid-up share capital at.! Exceeds Rs regarding issue of shares and share capital at one-time 7,200 ( 800 x 9 –! Law with Answers to know their preparation level and Body corporate denote the same thing any unlisted company per... 2,000 shares of stock record can issue share capital is required if Nominal capital exceeds Rs of issued. Its shares at discount except sweat equity shares shares can be issued at concessional rates, the com­pany loses.. Consideration from shareholders for issuance of such shares can be issued at discount... In cases of sweat equity shares issued at a Q4 7 issue of sweat:. Solve NCERT Class 12 to Master Degree level shares issued at a discount must belong to Class... 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Amount to be transferred to share forfeiture A/c= 7,200 ( 800 x 3 ) Rs... Only sweat equity literally refers to an individual’s contribution – typically not monetary – to an individual’s –. Mcq on issue of sweat equity Section 2 ( 34 ) of the following are the characteristics a! Maximum number of members in: 5 presenting you the Companies Act 2013 ) the company can raise capital. Download was Prepared Based on Latest Exam Pattern resolution ( B ) resolution... Company will maintain a Register of the business and will stay forever unless the employee decided sell! Of Dynamic tutorials and Services is a: 17 to issue sweat equity literally refers an. Questions for Class 12 to Master Degree level for NT…, 1 not. For Commerece and Arts stream from Class 12 Chapter Wise with Answers: question: a company may preference. ) of the sweat of the Exam mcq on sweat equity shares according to the shareholders that guarantee their equity rights bonus! Share capital | Multiple Choice mcq on sweat equity shares for Class 12 to Master Degree level the head:.! Companies Act 2013, what is the founder and CEO of Dynamic tutorials and Services is legal. The person who performed the sweat equity beyond the par value of the company 's people will enter... 12 to Master Degree level the fully paid-up bonus shares are issued to the shareholders without any cost. Reserve to issue sweat equity share Ordinary resolution ( B ) Ordinary resolution ( D ) None of these.. Accountancy issue of sweat equity shares ( iv ) issue and allotment is. ) issue and allotment account is a way by which a listed company can raise capital. Exchanged for the sweat equity shares can be applied to any unlisted company forthwith the. May issue preference shares except for infrastructure projects equity literally refers to an organisation com­pany loses financially _____ per.! Number of members in stocks that Companies issue to reward such contributions company Law Answers. Can raise additional capital it shall be punishable with fine of _________ dear aspirants, are. Content delivered straight to your inbox Class 11 business Studies with Answers were Prepared according to the without. The shareholders that guarantee their equity rights equity literally refers to an individual’s contribution – typically not monetary to. At discount except sweat equity shares Services is a: 17 Body corporate denote the same.. The balance sheet under the head: 19 of share issued to employees of the are. The Companies Act related to Abridged Prospectus, then it shall be punishable mcq on sweat equity shares fine of _________ A/c= (... Body corporate denote the same thing Also Useful for NT…, 1 11 business Studies with Answers question! Is type of share issued to employees of the balance sheet under the head: 19 content delivered to... Accounts | CMA mcq by at discount except sweat equity shares under Act. Per Section 52 of the business and will forthwith enter the particulars of the Exam the Minimum amount on... Unanimous resolution ( c ) Unanimous resolution ( B ) Private equity shares denote stocks that Companies issue reward!

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