Topic:ESOS to company directors ?
AnonymousPosted on 8th January,2021 05:15 PM
In ESOP when a director holds 8 percent of equity shares of a company and his spouse also holds 4 percent of equity shares in the company. So whether the company can further issue shares under Employee Stock Option Scheme to its director.\r\n
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BMC Associates says Replied on 18th July,2026 09:06 AM
Under the Companies Act, 2013, a company cannot grant ESOPs to an employee who is a promoter or belongs to the promoter group. Further, in the case of a director, eligibility depends on whether the director, either individually or together with relatives, holds more than 10% of the outstanding equity shares of the company (directly or indirectly). In your example, the director holds 8% and the spouse holds 4%, making their combined holding 12%. Since the aggregate holding exceeds 10%, the director would not be eligible to receive further shares under the Employee Stock Option Scheme (ESOP), unless a specific exemption is available under the applicable law (for example, certain exemptions for startups recognized under the Companies Act rules). For expert advice on ESOPs, corporate law, and compliance, businesses often consult experienced chartered accountant firms in gurgaon. A qualified chartered accountant gurgaon, trusted ca firm in gurgaon, or professional ca in gurgaon can help ensure compliance with the Companies Act, 2013 and applicable SEBI regulations.
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