Employee Stock Options (ESOP).
An ESOP gives employees the right to buy shares at a set price once their options vest. Unlisted companies issue ESOPs under section 62(1)(b) of the Companies Act, 2013 and the Share Capital and Debentures Rules; the SEBI share-based employee benefit regulations apply only to listed companies. We design the plan, prepare the approvals and set up the grant, tax and accounting processes.
Typically 2–3 weeks to design the plan and obtain board and shareholder approval; a trust structure or a fresh valuation adds time.
A partner — a chartered accountant or company secretary — from the first call to sign-off.
Based on your situation, and fixed in writing before any work starts.
Is this for you?
- Start-ups that want to attract and keep talent while conserving cash.
- Companies whose investors require an option pool before or after a round.
- Founders considering an employee welfare trust to hold and administer the pool.
What you receive at the end.
- 01ESOP scheme and a plain-language summary for employees
- 02Board and special resolution drafts, and the resolution filing with the Registrar
- 03Grant letter, vesting schedule and exercise form templates
- 04Register of employee stock options and updated fully diluted cap table
- 05Note on tax at exercise and sale, and on the accounting treatment
Employee Stock Options (ESOP), step by step.
Typically 2–3 weeks to design the plan and obtain board and shareholder approval; a trust structure or a fresh valuation adds time.
- 1
Plan design
We size the pool with you and set eligibility, the vesting schedule (at least one year from grant), exercise price and period, and leaver treatment.
- 2
Plan documents
We draft the ESOP scheme, grant letter and exercise form and, if you choose the trust route, the trust deed.
- 3
Board and shareholder approvals
We prepare the board resolution and the special resolution with the disclosures the rules require, and file the resolution with the Registrar.
- 4
Grants and registers
We issue grant letters, maintain the register of employee stock options and show the pool in your fully diluted cap table.
- 5
Exercise and tax
On exercise we handle allotment, compute the perquisite value for TDS through payroll and support share-based payment accounting in your financial statements.
What we need from you.
Don't have everything yet? We send a short checklist after the first call and work with what you have.
- Articles of association and current cap table
- Proposed pool size and initial grantees with designations
- Vesting and exercise terms you have in mind
- Latest audited financial statements and valuation report, if available
- Investor rights affecting the pool, from the shareholders' agreement
- DPIIT recognition and IMB certificate, if held
The fee depends on your situation. After a short call, the partner who will do the work tells you what's involved and gives you a fixed fee in writing — before any work begins.
- Government fees and statutory charges are billed at actuals.
- When you pay — upfront, in stages or on completion — is agreed in writing with the fee.
Questions about Employee Stock Options (ESOP).
Ready to discuss Employee Stock Options (ESOP)?
30-minute confidential call — no proposal, no commitment. A partner will write back within one business day.