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ESOP

Alok D. Mishra (Company Secretary Manager -Legal) (93 Points)

10 March 2011

a pvt company wishes to go for ESOP, can it go for ESOP? what are the guidelines for the same and how to start with it? Can anyone please provide me checklist for the same????

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4 Replies

Jaideep (Service) (1368 Points)
Replied 10 March 2011

Hi Alok,

In Companies Act you will find reference for stock options in Explanation II of section 79A. SEBI guidelines are not applicable to ESOP by unlisted companies. As far as RBI guidelines is concerned, Company can not allot options/shares more than 5% of its total paid up capital to non resident employees under ESOP.

Procedures will be as fallow;

Get the ESOP scheme approved in Board Meeting and Setup compensation commitee for administering ESOP.
Get the ESOP scheme approved by members by special resolution under 81(1)(A) and others.
File form 23 with ROC.
Form 2 as and when options converted into shares.

Regards

Jaideep Pandya

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 10 March 2011

Agree with Jaydeep..

In listed companies there is heavy compliances of SEBI Guidelines and a very long and expensive process but in case of private company there is no issue. Just follow above procedure.

prshankar.acs@gmail.com (prshankar.acs@gmail.com) (33 Points)
Replied 11 September 2011

Is it necessary for the Articles of a private company to authorise the issue of shares under ESOP?

G W and Associates (Properitor) (29 Points)
Replied 09 October 2012

Hello Sir,

a pvt company wishes to go for ESOP, can it go for ESOP? what are the guidelines for the same and how to start with it? Can anyone please provide me checklist, Board Resolutions and Compensation Commmitee minutes, EGM Minutes & Notices for the same.