Scheme
Pool, eligibility, terms.
All policies & documentation services
Policies & Documentation
ESOP Policy and Scheme Documents
FinAura drafts your employee stock option plan: the scheme with pool size, eligibility, vesting, exercise and leaver terms, the grant letters, the board and shareholder approvals the Companies Act requires, and a register to track grants and exercises. Tax treatment for employees and the company is explained, including the deferral available to eligible startups.
- Written for your company, not templates
- Drafting support, ready for legal review
- Bangalore and across India
What is covered
What ESOP Policy and Scheme Documents Covers
From the pool to the first grant letter.
Vesting
Schedules and cliffs.
Approvals
Board and special resolution.
Grant letters
For each employee.
Tax
Perquisite and capital gains explained.
Register
Grants and exercises tracked.
How the month runs
How It Works
Design, approve, grant, track.
Step 1
Design
- Pool size
- Eligibility
- Vesting
Step 2
Approve
- Board
- Special resolution
- Filings
Step 3
Grant
- Letters
- Acceptance
- Register
Step 4
Track
- Vesting
- Exercises
- Allotments
Your part
What We Need From You
- 01Cap table and pool you have in mind
- 02Employees to be covered
- 03Investor consents, if needed
- 04Your lawyer's contact
Our part
What You Get
- An ESOP scheme ready for approval
- Grant letters
- Approvals and filings done
- A register that tracks every option
A common question
How are ESOPs taxed in India?
Generally, employees pay tax as salary on the difference between fair value and exercise price when they exercise, and capital gains when they later sell the shares.
Employees of eligible startups can defer the tax on exercise until a later event, under the conditions the law sets. We explain the treatment in the scheme and grant letters.
See share allotment and ESOP filingsGrantsLetters and register
ApprovalsBoard and shareholders
SchemeDesigned
Who it is for
Who It Is For
Startups hiring senior talent
Equity in the offer.
Companies after a round
Pool set by investors.
Companies with informal promises
Options promised, never documented.
LLPs converting to companies
To offer ESOPs.
The rules, in plain English
What the Law Says
Companies Act, 2013
Section 62(1)(b) and Rule 12
A company issues shares under an employee stock option scheme approved by a special resolution, with the disclosures and conditions the Share Capital and Debentures Rules set.
Official source: mca.gov.inIncome-tax law
ESOP taxation
The value of shares allotted on exercise, above the price paid, is taxed as salary, with deferral for employees of eligible startups; later sale gains are capital gains.
Official source: incometax.gov.inThis is general information, not advice for your situation; we confirm what applies to you before any work starts.
Questions we get asked
ESOP Policy and Scheme Documents: Questions, Answered
Can a private company issue ESOPs?
Yes, under section 62(1)(b) of the Companies Act and the Share Capital and Debentures Rules, with a special resolution.
Can founders get ESOPs?
Promoters and directors holding a significant stake generally cannot, except in startups within the period the rules allow.
Is ESOP income taxable on grant?
No. Tax generally arises on exercise and again on sale, with deferral available for eligible startups.
Do you handle the allotment when options are exercised?
Yes, through our ROC team, including the filings and demat credit.
Often Taken Together
All 11 Policies & Documentation services01Policies & DocumentationFounders' and Shareholders' Agreement Drafting SupportThe commercial terms between founders and investors written into documents, ready for legal review.02Tax & ComplianceROC & Corporate ComplianceAnnual ROC filings, director KYC, event-based filings and LLP to company conversion.03Tax & ComplianceTaxationGST, income tax, TDS, tax planning and notice replies, from reconciled data.