Sweat Equity (S.54)
Issue sweat equity shares for IP/know-how/value addition: Board + SR, valuation by registered valuer. Sweat Equity (S.54) takes 6 steps over about 103 days and is filed with the ROC on PAS-3 and MGT-14.
Last updated: 10 August 2026
What if it’s filed late?
MCA charges additional fees that rise with the delay, up to 12 times the normal filing fee. OnCompliance tracks the date and warns you before it costs anything.
What is the timeline for Sweat Equity (S.54)?
6 steps over about 103 days, filing PAS-3 and MGT-14 with the ROC. Each deadline below runs from the step before it.
| # | Step | Form filed | Deadline |
|---|---|---|---|
| 1 | Obtain Valuation Report | None | within 14 days |
| 2 | Board Approval | None | within 7 days |
| 3 | Pass Special Resolution | None | within 30 days |
| 4 | Allot Sweat Equity Shares | None | within 7 days |
| 5 | File PAS-3 | PAS-3 | within 15 days |
| 6 | File MGT-14 | MGT-14 | within 30 days |
What are the steps, in order?
The 6 steps below run in order; the day counts show how long each one allows.
Obtain Valuation Report
Get valuation of IP/know-how by a registered valuer. Max 25% of paid-up (15% for listed).
Board Approval
Board approves sweat equity issue.
Pass Special Resolution
Members pass SR at GM. Min 1-year employment required.
Allot Sweat Equity Shares
Allot shares as per SR terms.
File PAS-3
File return of allotment within 15 days.
File MGT-14
File SR with ROC.
Every guide runs like this in OnCompliance: steps in order, dates in view, paperwork made for you at each step.
Common questions
How long does Sweat Equity (S.54) take?
About 103 days across 6 steps. The first step is: Obtain Valuation Report.
Which MCA forms are filed for Sweat Equity (S.54)?
PAS-3 and MGT-14. PAS-3 is the return of allotment filing under §39 of the Companies Act 2013. MGT-14 is the filing of resolutions filing under §117 of the Companies Act 2013.
What does it cost if PAS-3 and MGT-14 are filed late?
MCA charges additional fees that rise with the delay, up to 12 times the normal filing fee.
Can OnCompliance run Sweat Equity (S.54) for me?
Yes. OnCompliance runs the same steps in order, dates in view, with the paperwork made for you at each step.