ESOP schemes

An ESOP lets a startup reward employees with ownership instead of cash. It must be approved and run in line with the Companies Act, or it becomes a problem in the next due diligence. We set up the scheme and keep its records in order.

What we handle

• ESOP scheme drafting: pool size, eligibility, vesting and exercise terms
• Board and shareholder approvals with the required disclosures
• Grant letters and vesting schedules
• Allotment on exercise and related filings
• Register of employee stock options (SH-6)
• ESOPs for employees of an Indian subsidiary of a foreign company

What we usually need from you

• Proposed pool size and list of eligible employees
• Current cap table

Frequently asked questions

What is the minimum vesting period for ESOPs?

Options cannot vest earlier than one year from the date of grant.

Can founders and promoters get ESOPs?

Normally no. Promoters and directors who hold more than 10% of the company cannot be granted ESOPs. A DPIIT-recognised startup company may grant ESOPs to them for up to ten years from incorporation.