ESOP Guidelines

[CS Sonia Sehgal]

Dear all,

 

One Unlisted Public Company wants to issue ESOPs upto 5% Equity Capital of the Company.

ESOP Guidelines are issued by SEBI. Are they apply to only Listed Companies or other Companies (Private/Unlisted Public Companies) too?

If these guidelines are applicable to only Listed Companies, are there any other ESOP guidelines for the Unlisted Public Companies? Please forward the same.

Is there any maximum limit upto which a Company can issue shares to its employees under ESOP Scheme?

 

Prompt reply is requested.

 

Thanks & Regards

CS Sonia Sehgal

[Alagar M]

Dear Sonia Sehgal,

 

1. SEBI ESOP guidelines is not applicable to an unlisted Company. It is applies to unlisted Company only when there is a outstanding options under ESOP Scheme at the time of filing of offer document with SEBI for the purpose of IPO.
2. There is no ceiling for issuance of shares under the ESOP Scheme, even the Company can go for 100% equtiy capital. Further in the case of issuance of shares under ESOP to the employees working in abroad, it is limited to 5% of the paid up capital.
3. Unlisted Companies ESOP Scheme is subject to compliance of ESOP IT Notification issued in the year 2001. Herewith attached for your reference.
4. Shares issued under the ESOP is subject to FBT and computation of FBT is as per IT Notification issued in the year 2007.

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Thanks & Regards
Alagar
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