Unicorn (Business) (154 Points)
16 December 2013We've incorporated a Pvt Ltd company 2 months back , in oct'2013.
I wish to go in for ESOP, so that I can pay lesser in the form of salary in the first couple of years, till the company grows.
But I hear ESOp cannot be given in the first year? Is it true?
Syam Kamal
(Company Secretary)
(66 Points)
Replied 16 December 2013
Under the Companies Act, 1956, there is no enabling provision for issue of ESOP. For listed Companies, SEBI has promulgated regulations for the same. Since yours is a private company, ESOP can not be issued in the absence enabling provisions. But you can issue sweat equity shares as per Unlisted Companies (Issue of Sweat Equity Shares) Rules 2003. But I dont think that will serve your purpose.
The Company Law Desk
(CA Practice )
(103 Points)
Replied 29 April 2014
Sir/ Mam
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Pranjal Jain
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