Article · 18 min read

ESOP Scheme in India: Definition, Structure, and Filing Guide

EquityList Free Intermediate India

This is the exact playbook for a Pvt Ltd founder: the eight sequential approvals in order, from checking your AoA permits ESOPs, to the board resolution, the 21-day shareholder notice, the ordinary-resolution vote, filing MGT-14 within 30 days, issuing grant letters, and maintaining the SH-6 register. It also lists the 15 clauses your scheme document must carry (vesting, separation treatment, clawback), so nothing gets skipped in due diligence.

  • Your ESOP is not real until the board approves the scheme, shareholders pass the resolution, and you file Form MGT-14 with the RoC within 30 days
  • A grant only exists once a signed grant letter states the option count, exercise price, vesting schedule, and expiry; verbal promises carry zero legal weight
  • You must maintain a Register of Employee Stock Options in Form SH-6, and missing it puts the company in regulatory default
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The question it answers

  1. How do I set up an ESOP pool and grant equity to my early employees legally?

Read with it

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