Employee Stock Option Scheme(ESOP)
Let ourstartupindia.com help you
![](https://ourstartupindia.com/wp-content/uploads/2020/10/brief.png)
Businesses Served
0
+
![](https://ourstartupindia.com/wp-content/uploads/2020/10/ratting.png)
Google Rating
0
/5
![](https://ourstartupindia.com/wp-content/uploads/2020/10/value-formoney.png)
Lowest Fee
0
/-
Employee Stock Option Plans are the plans in which employees get the right to purchase a number of shares (decided by the employer) in lieu of Salary in the company at a discounted price (less than the market price). The option provided under this scheme confers a right but not an obligation on the employee. Employees have to wait for a certain time period – known as the vesting period –before they can exercise the right to purchase those specified number of shares. Upon vesting of options, employees can exercise the options to get shares by paying the pre-determined exercise price.
Traditionally, ESOPs were given to remunerate senior employees and to acknowledge their proven contribution to the company. However, in modern times, ESOPs are used as compensation and motivational tool as startups can’t afford to spend high salaries in the beginning stage. Employee Stock Options in India has gained immense popularity in recent times with the emergence of a vibrant startup ecosystem in the country.
ESOPs can be treated as a retainership instrument for small businesses as there is a lock-in period for exercising the right to purchase the shares. Thus, a business can retain its employees. If an employee opts for this option then he has to serve the lock-in period to become eligible to exercise it.
Getting shares of the company in which they are working gives employees an ownership feeling. They start feeling that they are not employees of the organization but owners. Also, they get to share the profits of the company in the form of dividends and are motivated to work for the best of the company.
Businesses that need funds and are not in a position to spend hefty amounts can offer this option to their employees in lieu of salary and motivate them to work for the betterment of the company.
At Our Startup India, we offer a range of packages to suit your needs. Start by selecting the appropriate one, fill out the required forms, or simply speak to our experts online for assistance.
This is the first step and basic step required for the ESOP scheme. OurstartupIndia professionals will carefully select employees for participation in the ESOP scheme after considering his/her experience, roles, and responsibility, etc.
It is the most important step for Companies. The following are essential things that must be kept in mind while drafting ESOP policy: Quantum of ESOP pool, Employees Selection and evaluation criteria for participating in the scheme, Rights of option holders, Rights of shareholders like Tag along, Drag along and pre-emption rights, and Tax liabilities.
Once your name is approved, Our Startup India willThere must be a minimum 1-year time gap in between the granting of option and vesting of the option. For e.g: If you grant the option on 01st April 2019, it can’t be exercised before 01st April 2020. After completion of the vesting period, employees can apply for shares or further wait up to the last date on which exercise can be made or not apply for the shares. ESOP grants only rights and no obligation to employees for the purchase of shares.
Save upto-10% cost on this package
Save upto-20% cost on this package
Save upto-30% cost on this package