New Rich Text Document - Question 1 i Sweat equity is the...

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Question 1 i: Sweat equity is the best form of reward for those who Contribute to the growth of a company. Discuss. Sweat Equity, as the name suggests, is the equity issued in lieu of Contribution in terms of time given, efforts made and services rendered by The employees of the company. It is used to refer to a form of compensation by businesses to their owners or employees. The term is sometimes used in Partnership agreements where one or more of the partners contribute no Financial capital. In the case of a business startup, employees might, upon Incorporation, receive stock or stock options in return for working for below market Salaries (or in some cases no salary at all). The equity that is created in a company or some other asset as a direct Result of hard work by the owner(s) The Companies Act provides for issue of sweat equity shares to employees And/or directors of companies on favorable terms in recognition of their Work. Sweat equity makes employees part owners of the company and gives Them a share of profit earned.
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