Difference between Sweat Equity and the Issue of Capital on a Preferential Basis

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Points	Sweat Equity Shares	Issue of capital on preferential basis
Meaning	Sweat equity Shares mean equity shares by a company to its employees or directors at a discount or for consideration, other than cash for providing know-how or making available right in the nature of intellectual property rights or value additions, by whatever name called.	A preferential issue is an issue of shares or of convertible securities by listed companies to a select group of persons under Section 81 which is neither a rights issue nor a public issue.
To Whom Issued	Sweat Equity Shares are issued to employees or directors.	A preferential issue is an issue to a select group of persons.
How Issued	Sweat equity Shares are issued at a discount or for consideration, other than cash.	A preferential issue at a par or at premium.