Employee Stock Option Plan (ESOP) in Ranchi
Give your team a stake in your company’s growth. We design your ESOP scheme, prepare the resolutions and complete the filings so it is legally sound.
Attract, reward and keep your best people
An Employee Stock Option Plan lets a company grant employees the right to buy its shares at a set price after a vesting period. It aligns your team with the company’s growth and is especially useful for startups that cannot match large salaries.
An ESOP must follow the Companies Act, 2013 and its rules, with shareholder approval and proper documentation, and employees face tax at exercise and when they sell. We help you design the plan, draft the scheme and grant letters, file the required forms and keep your cap table in order.
What an ESOP involves
- A scheme approved by the board and by shareholders through a special resolution
- Employees and directors can be granted options, with limits for promoters, large shareholders and independent directors
- A minimum gap of one year between grant and vesting
- An exercise price decided by the company, within the scheme
- Options are generally not transferable and are exercised only by the employee
- Recognised startups enjoy some relaxations, which we confirm for your company
Why get it done by experts
Motivate and retain
Employees share in the upside as the company grows.
Conserve cash
Offer ownership when cash for salary hikes is limited.
Legally sound
Resolutions, grants and filings done correctly.
Organised cap table
Track grants, vesting and exercise clearly.
Keep these ready
Scanned copies are enough to begin. We tell you if anything else is needed for your case.
About the company
- Certificate of incorporation, MoA and AoA
- Latest financial statements and capital structure
- Shareholding pattern and cap table
- Details of promoters, directors and key employees
About the plan
- Proposed pool of options and number per employee
- Vesting schedule and exercise price
- Eligible employees and grant criteria
- Details of the valuation of shares, where required
How Around Tax works for you
Free consultation
We understand your goals, team and capital structure.
Design the plan
We design the pool size, vesting, exercise price and eligibility.
Draft the scheme
We prepare the ESOP scheme, grant letters and resolutions.
Approvals and filings
We hold the board and shareholder approvals and file MGT-14.
Grants and allotment
We issue grant letters, track vesting and file PAS-3 on allotment.
What happens after
These are the usual follow-up steps. We can handle them for you.
- Issue grant letters and obtain acceptances
- Track vesting and exercise dates for each employee
- File Form PAS-3 on allotment of shares on exercise
- Disclose the ESOP details as required in the board’s report
- Maintain the register of employee stock options
- Advise employees about tax at exercise and on sale
Common questions
Can a private limited company issue ESOPs?
Yes. A private company can issue employee stock options under the Companies Act, 2013 with a special resolution of shareholders and the required disclosures.
Who can receive ESOPs?
Employees and directors, subject to the rules. Promoters, certain large shareholders and independent directors have restrictions, with relaxations for recognised startups.
What is vesting?
It is the period an employee must wait before exercising the options. The law requires at least one year between grant and vesting.
How are ESOPs taxed?
Generally the benefit is taxed as a perquisite when the employee exercises, and gains on sale are taxed as capital gains. Some startups can defer the tax. We advise on your case.
Is a valuation needed?
The fair market value for tax purposes is determined as per the income tax rules, often with a valuation report. We guide you on when it is needed.
This page is general guidance as we understand current law. India’s four labour codes came into force on 21 November 2025, and rules, schemes, wage ceilings, rates, fees and procedures are still being updated by the Centre and by states. We confirm the latest requirements for your establishment before we begin.
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Register your ESOP with Around Tax
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