Employee Stock Option Plan

The Employee Stock Option Plan (ESOP) or Employee Stock Option Scheme (ESOS) is a type of equity compensation granted by companies to their employees and executives. It is a scheme under which companies sell their employees shares by which the employees become shareholders of the company and thus holds ownership of the company at a small level. ESOP is a tool used by a company to retain its employees and get them awarded for being associated with the company. Under this scheme, the employees are granted some rights, called as stock options, to get the shares of the company for free or at a concessional rate, at a predetermined price or the price to be determined on the prefixed method, as compared to the potential market rate.

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  • Quick
    Turnarounds

  • Value
    For Money

  • Expert
    Professionals

  • Custom
    Fit Solutions

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HOW DOES IT WORK ?

HOW DOES IT WORK ?

Step 1

We collect and verify the supporting documents & forms required for Employee Stock Option Plan

01

Step 2

Our Employee Stock Option Plan experts draft and prepare the required supporting documents

02

Step 3

We take care of your filing or We take care of your Employee Stock Option Plan

03

WHY CHOOSE LEGALO ?

Quick Turnarounds

Have access to a wide range of quality services at reasonable and competitive prices

Value For Money

We understand Time is the most valuable resource and are flexible and responsive to your requirements

Expert Professionals

We cater to a wide range of services across legal, CA, CS and consulting and bring to the table the most relevant and experienced professional to provide the right solution.

Custom Fit Solutions

We provide customized solutions to meet your unique requirements.

FREQUENTLY ASKED QUESTIONS ?

  • Legalo is a platform to help you connect with the best professionals, legal experts & financial experts to deliver efficient and cost-effective solutions to your business and personal needs.
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  • Legalo Connect you with the best industry experts to deliver efficient and cost effective, tailor-made solutions. We also understand that time is the most valuable resource and we offer solutions with a very quick turnaround time.
  • We offer accounting and bookkeeping services, Payroll Maintenance, TDS/GST Filing, Individual income tax filing.
  • Legalo offers both Labour compliance & Corporate Compliance solutions, Following are the list of labour compliance solutions. a) Provident Fund Registration b) ESI Registration c) Professional tax Registration d) Shops & Establishment LIcense e) Employee Stock option plan
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FREQUENTLY ASKED QUESTIONS ?

faq

LEGAL BITS YOU SHOULD KNOW

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Who can opt for an Employee stock option plan?

  1. All the employees of a company can opt for an Employee stock option plan when offered by their organizations and they fit its criteria. Generally, the permanent employees are provided the provision of ESOP's because they are the only ones who will stick to the company for a long period. The reason to do this is that newly startup companies do not have enough money to pay the salaries of the employees. Employee stock option plan has been provided under section 2(37) of the companies act, 2013
  2. The company is benefitted in a way that the startup does not have enough money to pay the salaries of the employees. So they make the employees the shareholder of the company. Moreover, It helps the employer to retain the company and assure a good level of performance in the work

How to apply?

Various steps are required to be done for the allotment of ESOP's to the employees. These are as follows:

  1. Preparation of ESOP policy
  2. Board Approval
  3. General Meeting
  4. Filing of Form MGT-14
  5. Vesting of ESOPs
  6. Allotment of Shares
  7. Issue Share Certificate & Payment of Stamp Duty

How can Legalo help you?

Our partners & associates bring years of experience to the table to help you navigate and deliver these works. Our company can customize a program to meet your specific needs and budget. If you need any legal or professional assistance in searching the right trademark for your business, contact us here.

Advantages of ESOP’s

  1. Getting shares from the company they work in gives employees a sense of belonging. They begin to feel that they are not employees of the organization but owners. Also, they can share the profits of the business in the form of dividends and are motivated to work for the best of the business.
  2. Employees become shareholders of the company and hold a small share of ownership in the company.
  3. This gives companies the ability to pay without reducing accounting profits.

Disadvantages of ESOP’s

  1. ESOP could become an obligation for the company over time.
  2. These types of stocks do not have an option premium and the only compensation the company gets is in terms of increased liquidity in its business and savings in certain taxes.
  3. There are also risks of disputes when transferring shares and the value at which the shares must be transferred.


 

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