Starter
₹39,999+ GST
Scheme and policy.
- ESOP scheme drafting
- Vesting and exercise policy
- Grant letter template
- Board resolution
ESOP planning for startups: a pool, a scheme and grants that hold up.
Pool size, vesting, valuation, the special resolution and MGT-14, plus a tax note your employees understand.
Price estimator
- 1Price
- 2Details
- 3Done
Plan
Everything in Starter, plus
- Valuation coordination
- Shareholder resolution and MGT-14
- Pool creation and cap table update
- Employee FAQ session
MCA filing fees paid at cost. Valuation is quoted by the registered valuer.
- Professional fee₹49,999
- GST at 18% on our fee₹9,000
- Government feesMCA filing fees paid at cost. Valuation is quoted by the registered valuer.Itemised at cost
Fee plus GST
MCA filing fees paid at cost. Valuation is quoted by the registered valuer.
Key facts
- Service
- ESOP scheme, pool creation and the first grants for a Private Limited Company
- Governing law and forms
- Companies Act 2013, Section 62(1)(b) and Rule 12 of the Share Capital and Debentures Rules; special resolution, MGT-14, PAS-3 on exercise
- Time taken
- 3 to 4 weeks from the scoping call, most of it waiting for the valuation and the general meeting notice
- Our fee from
- ₹39,999 + GST
- Government fees
- MCA filing fees paid at cost. Valuation is quoted by the registered valuer.
- Who it is for
- Private Limited Companies that want to hire with equity; an LLP cannot grant ESOPs
- Typical terms
- Pool of 5% to 15% of fully diluted equity, four-year vesting with a one-year cliff
- Tax
- Perquisite tax on exercise, deferred up to 48 months or until sale or exit for eligible DPIIT startups; capital gains on sale
Why founders trust BizExpress
- 4.8on Google
- 2,800+companies incorporated
- DPIIT-recognisedstartup
- 2 working hoursreplies within
Trusted by teams at
Is ESOP planning right for you?
It fits if you
You are hiring people you cannot yet pay market salary
Equity closes the gap for early engineers and leaders, but only if the grant letter, vesting and exercise terms are written before the offer goes out.
Your term sheet asks for an ESOP pool
Most investors ask for a pool of 5% to 15% before their money comes in. Creating it correctly changes what your own shares are worth, so the sizing matters.
You have promised equity on WhatsApp
Informal promises turn into disputes at the next round or at exit. A scheme, a board resolution and signed grant letters replace the promise with a document.
Transparent pricing. Government fees itemised, always.
Professional fees below are one-time and exclude GST. MCA filing fees are paid at cost, and the valuation is quoted by the registered valuer or merchant banker.
Growth
₹49,999+ GST
Scheme, valuation and the filings.
Everything in Starter, plus
- Valuation coordination
- Shareholder resolution and MGT-14
- Pool creation and cap table update
- Employee FAQ session
Why the ₹999 offers cost more
The ₹999 offerBizExpress
The scheme documentA template with another company's name still in the footerDrafted for your cap table, hiring plan and the exit terms you actually want
Shareholder approvalBoard resolution only, with MGT-14 never filedSpecial resolution at a general meeting and MGT-14 filed within 30 days
ValuationExercise price picked out of the airCoordinated with a registered valuer and, for the tax value, a merchant banker
Employees' questionsNobody explains what the grant is worth or what tax appliesA grant letter in plain English and an employee FAQ session
What happens, step by step
Counted in working days from the scoping call. A scheme and a first set of grants usually take three to four weeks, most of it waiting for the valuation and the general meeting notice period.
- 1Day 0 to 3
Pool sizing and design
We model the pool on your cap table and hiring plan for the next 18 months, then agree the vesting schedule, cliff, exercise price approach and what happens on leaving or an exit.
- 2Day 4 to 8
Scheme and policy drafted
The ESOP scheme, the vesting and exercise policy, the grant letter template and the board resolution are drafted under Section 62(1)(b) and the Share Capital and Debentures Rules.
- 3Day 9 to 12
Board approval and meeting notice
The board approves the scheme and calls a general meeting. Notice goes out 21 clear days ahead unless the shareholders consent to shorter notice, which most early-stage companies do.
- 4Day 12 to 20
Valuation
A registered valuer values the shares for the exercise price and Companies Act purposes. In the Growth plan we coordinate this and, where needed, the merchant banker report used for the perquisite value.
- 5Day 20 to 25
Special resolution and MGT-14
Shareholders pass the special resolution at the general meeting. We file MGT-14 with the ROC within 30 days of the resolution and open the register of ESOPs in Form SH-6.
- 6Day 25 onward
Grants issued
Grant letters go to each employee with the number of options, the exercise price, the vesting dates and the tax note. The cap table is updated to show the pool and the granted options.
What continues after the scheme is live
- Each new hireBoard approves the grant, letter issued, register updated
- Every yearESOP disclosures in the board's report attached to AOC-4
- At each funding roundPool top-up if needed, and a fresh valuation for new grants
- On exerciseShares allotted (PAS-3 filed), perquisite tax computed, TDS handled or deferred for eligible startups
- When an employee leavesUnvested options lapse to the pool; vested options are exercised within the scheme's window or lapse
Documents you need
Most of this is already in your incorporation folder or your cap table sheet. Share it on WhatsApp or a shared drive.
About the company
- Certificate of Incorporation, MOA and AOA
- Current cap table, including any SAFE, CCD or CCPS holders and option promises already made
- Shareholders' agreement or term sheet, if investors are in or coming in
- Latest audited balance sheet, for the valuation
- DPIIT recognition certificate, if you have one
About the plan
- Hiring plan for the next 12 to 18 months with intended grants
- Names, roles, joining dates and PAN of employees receiving the first grants
- Your preferences on vesting, cliff, exercise window after leaving and treatment on an exit
Want this as a checklist?
We send the list to your WhatsApp so you can tick it off from your phone.
Six mistakes we see every week
- Sizing the pool as a share of today's company, not the round
Investors usually ask for the pool to exist before their money comes in, so the founders take the dilution. Model both the pre-money and the post-money pool before agreeing a number.
- Vesting that starts before the scheme exists
The Rules require at least one year between grant and vesting. Backdating grants to a joining date before the scheme was approved does not work; use a joining-date credit inside a valid scheme instead.
- No exercise window for leavers
If the scheme is silent, vested options of an employee who leaves may linger or lapse unpredictably. Fix a window, commonly 90 days to a year, and say what happens on retirement, death or termination for cause.
- Granting to a promoter or a 10% shareholder
Promoters and holders of more than 10% of equity are excluded from ESOPs, with a time-bound exemption for DPIIT-recognised startups. Check the exemption before promising a co-founder options.
- Forgetting the tax on exercise
Exercise creates a perquisite equal to the fair market value less the exercise price, taxed as salary with TDS. Employees who exercise without a plan for the cash face a tax bill on shares they cannot sell.
- Skipping MGT-14
A special resolution that is never filed with the ROC leaves the scheme open to challenge in due diligence. MGT-14 is due within 30 days, and late filing adds a fee that rises with the delay.
What founders say
It's been 5 years since the incorporation of my private limited company and they are experts at what they do.
Knowledgeable, professional and very cooperative. We can totally concentrate on business, leaving all financial compliance to them.
Thanks Team BizExpress. It was refreshing to see an online service provider with such professionalism.
Questions founders ask about ESOP Planning
How much does ESOP planning cost?
Our professional fee starts at from ₹39,999 for the scheme, the vesting and exercise policy, the grant letter template and the board resolution. The Growth plan adds valuation coordination, the shareholder resolution and MGT-14, the pool creation and an employee FAQ session. MCA filing fees are at cost, and the valuer quotes their fee separately.
How long does setting up an ESOP take?
Three to four weeks from the scoping call to the first grant letters. Drafting takes about a week. The rest is the general meeting notice period, which shareholders can shorten by consent, and the valuation, which typically takes one to two weeks. MGT-14 is filed within 30 days of the special resolution.
How big should the ESOP pool be?
Most Indian startups set aside 5% to 15% of fully diluted equity, with the number driven by the hiring plan for the next 12 to 18 months rather than a rule of thumb. A pool that is too large dilutes founders for options that are never granted; too small means a top-up at the next round. Our pool calculator shows the dilution for each size.
What vesting schedule is standard?
Four years with a one-year cliff, then monthly or quarterly vesting, is the most common schedule. The Companies Act Rules require at least one year between the grant and the first vesting, which the cliff satisfies. Some companies front-load or back-load vesting for senior hires; we set it out in the scheme so every grant follows the same policy.
What approvals does an ESOP scheme need?
A board resolution to adopt the scheme, a special resolution of shareholders at a general meeting under Section 62(1)(b), and Form MGT-14 filed with the ROC within 30 days of that resolution. Each grant afterwards needs a board resolution and an entry in the register of ESOPs. If investors hold veto rights, their consent under the shareholders' agreement is also needed.
How are ESOPs taxed for the employee?
Twice. On exercise, the difference between the fair market value on that date and the exercise price is a perquisite taxed as salary, with the company deducting TDS. On sale, the gain over that fair market value is a capital gain, long-term after 24 months for unlisted shares. Employees pay nothing at grant or at vesting.
What is the DPIIT startup tax deferral?
Employees of a DPIIT-recognised startup that holds an 80-IAC certificate can defer the tax and TDS on the exercise perquisite. It becomes payable at the earliest of 48 months from the end of the relevant tax year, the sale of the shares, or leaving the company. This removes the problem of paying tax on shares that cannot yet be sold.
Who does the valuation, and why are there two?
A registered valuer values the shares for the Companies Act, which sets the exercise price and supports the allotment. For the perquisite tax value of unlisted shares, the Income-tax Rules require a merchant banker's report. Many startups take both from the same firm. We coordinate the valuation in the Growth plan; the valuer quotes their fee directly.
Can an LLP grant ESOPs?
No. Only a company can issue options over its shares. An LLP has partners and contribution, not shares, so there is nothing to option. Founders who run an LLP and want to hire with equity either convert to a Private Limited Company or offer a profit-share arrangement in the LLP agreement, which is a different thing and taxed differently.
Can founders or directors receive ESOPs?
Employee directors can, but promoters and anyone holding more than 10% of the equity are excluded under the Rules. DPIIT-recognised startups get an exemption from this exclusion for a period after incorporation, which is why founders of recognised startups can sometimes be granted options. We check the exemption before drafting a founder grant.
What happens to ESOPs when an employee leaves?
Unvested options lapse and return to the pool. Vested options can be exercised within the window the scheme sets, commonly 90 days to a year, after which they lapse too. Termination for cause usually cancels everything. On death, vested options pass to the nominee and unvested options often vest in full. The scheme decides all of this, so we write it carefully.
Do we need a trust to run the ESOP?
Not usually at an early stage. Most startups grant options directly and allot shares on exercise. A trust helps when there are many employees, secondary sales to fund exercise, or a need to buy back shares from leavers, and it comes with its own compliance and cost. We suggest the trust route only when the numbers justify it.
Sources and official references
Government fees, forms and due dates on this page are checked against these portals. Where a state or a year changes a figure, we say so on the call.
Tell us what you're building. We'll send an all-inclusive price today.
Or use the estimator at the top of the page for an instant figure.