Employee Stock Option Plan ( ESOP)
Usually, it is issued to make the employees stay with their organization for a long time
Benefits of Employee Stock Option Plan ( ESOP)
- Attract top talent
- Build motivation among employee
- Keep them longer in the company
Employee Stock Option Plan ( ESOP) Overview
ESOP is an employee benefits program under which the company gives the employees ownership in the form of shares at a predetermined rate. Usually,it is issued to make the employees stay with their organization for a long time. hence motivating them to perform better and offer their loyalty to the company
Why do we need to use ESOP?
- It is a tax-favored strategy which delivers fair value for shareholders
- It benefits the people who play a encouraging role and remain in the company for a long time
- ESOPs create a tax-favored independent and sustainable company
- It creates and preserves a legacy
Requirement for ESOPs
- Firstly ,Check the articles for any specific provision
- The date and members of the committee should be included
- Notice of general meeting to be granted.
- Hold a general meeting for approval of shareholders additionally, include the authorization for the issue of shares and the formation of the compensation committee
- There must be a compensation committee (CC)
- Approval of shareholders
- The requirement of a photo copy of certificates
- Filing of PAS-3 Form
TYPES OF ESOPs
- 1. Unleaveraged ESOPs
- 2. Leaveraged ESOPs
- 3. Issuance ESOPs
ELIGIBILITY FOR ESOPs
ESOP is an employee benefits program under which the company gives the employees ownership in the form of shares at a predetermined rate. Usually,it is issued to make the employees stay with their organization for a long time. hence motivating them to perform better and offer their loyalty to the company
How to register
- Draft The ESOP Rules
- Approve The Rules And The Option Pool
- Board And Shareholder Approval
- Shareholder Waivers And Consents Grant your options
- Prepare Your Directors’ Resolutions
- Send Each Recipient Their Grant Letter:
- Update Your Register Option
Documents Required for Employee Stock Option Plan ( ESOP)
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