The Startup Gig
ESOP for Startups
Are you looking to attract top talents to your company while affording the liquidity to the company?
Overview of ESOP Services by Startup Gig
ESOP is a way of rewarding the employees of the company with stock option plans along with their fixed remuneration. It gives the eligible employees the benefit of buying stocks of the company at a fixed predetermined or discounted price
Emerging companies typically face a host of legal considerations but have limited personnel and monetary resources to address all of them comprehensively. Often lacking in-house human resources and legal expertise, many emerging companies employ a “band-aid” approach to HR-related issues, addressing problems only as they arise.
There are, however, a few common employment law issues as to which a bit of advanced understanding and planning can do a great deal to minimize the downstream risks of expensive legal headaches.
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Our common aim is to bring more transparency and efficiency to entrepreneurs and startups in regards to legal and other essential aspects, providing the correct resources and services for entrepreneurs at every stage in the startup journey
Comprehensive ESOP For Startups Solution
Our concrete recommendation and solutions will ensure smooth operations and reduce the risk of any potential pitfall. Our pedigree in working with start-ups, makes our approach more service oriented
A Startup helping Startups
The Startup-Gig being a start-up itself, works with the vision to make the journey for other fellow start-ups work and aims to make the deals work.We understand the nuances involved in the process better than anyone.
All Legal Solutions under one roof
Under one roof we provide the correct legal and other essential resources and services for entrepreneurs. From helping the company with the ESOP plan and the ESOP agreement to guiding you with the filing of essential forms.
Mentored 2000+ Startups
In the span of 7 years, we have mentored more than 2000+ startups for legal consultation. The Startup Gig helps ambitious entrepreneurs and early-stage companies with best-in-class fundraising services to scale up their business.
4.9 Customer Rating
We love helping startups in raising funds and our clients like what we do, check out our reviews on google. We have got 4.9 Customer rating in google from our clients
Trusted by 2000+ Startups and counting, including…
How do ESOPs benefit the employees and the employers?
ESOPs reward the employees with the benefit of buying stocks at a predetermined rate irrespective of the current market price and so the employees can sell their stocks at heavy rates later on and make huge profits. This gives the employees ownership of the company and helps them directly benefit from the success of the company thus improving the productivity of employees and helps the business grow. This helps to build community wealth as well.
On the other hand companies can attract and retain employees through ESOPs and they can increase their cash flow by paying a part of the remuneration in the form of stocks instead of cash. This way, the company can payer higher remuneration to employees even when they cannot afford to pay high compensation packages in the form of cash and attract productive assets
The legal framework governing ESOPs in India
The issuance of ESOPs is governed under Section 62(1)(b) of the Companies Act, 2013. It reads
S.62: Further issue of share capital.—(1) Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares shall be offered –
(b) to employees under a scheme of employees‘ stock option, subject to special resolution passed by company and subject to such conditions as may be prescribed.
What kinds of employees are eligible for ESOPs?
According to Rule 12 of the Companies (Share Capital and Debenture) Rules, 2014, the following people are eligible for ESOPs:
(a) a permanent employee of the company who has been working in India or outside India; or
(b) a director of the company, whether a whole-time director or not but excluding an independent director; or
(c) an employee as defined in clause (a) or (b) of a subsidiary, in India or outside India, or of a holding company of the company
but does not include—
(i) an employee who is a promoter or a person belonging to the promoter group; or (ii) a director who either himself or through his relative or through anybody corporate, directly or indirectly, holds more than ten percent of the outstanding equity shares of the company.
However, in the case of a start-up company[1], the conditions mentioned in sub-clauses (i) and (ii) shall not apply up to five years from the date of its incorporation or registration.
As defined in notification number GSR 180(E), dated 17th February 2016 issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry Government of India.
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Frequently Asked Questions for Fundraising Advisory Services For Startups
What is the full form of ESOP ?
Employee Stock Ownership Plan is the full form of ESOP
What is an ESOP ?
ESOP stands for Employment Stock Ownership Plan. Generally, if you are an employee you get rewarded for your work in the form of a salary and we have often heard employees comparing their profits to the profits of the owners
Will my company's information remain confidential?
Yes, they do. We sign an NDA and you can always pitch your business without disclosing your classified information
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