Article · 9 min read

Understanding Vesting, Exercise, and Lock-In in ESOPs (India)

CSA & Associates Free Intermediate India

A company-secretary firm's plain-English breakdown of the mechanics behind your ESOP exit, grounded in the actual rule (the one-year minimum vesting under Rule 12(6) of the Companies Share Capital and Debentures Rules). It separates good-leaver from bad-leaver treatment and uses a real example of a Delhi SaaS firm extending its window to six months, so you know what a founder-friendly plan looks like and what to ask for before you resign.

  • Indian law mandates a minimum one-year vesting period, so anything vested is legally yours to exercise inside the window
  • Good-leaver vs bad-leaver clauses can forfeit even vested options if you exit in breach, so resign cleanly and serve your notice
  • Exercise windows commonly run 30 to 180 days post-exit; a six-month window is generous and worth negotiating for while you are still inside
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The question it answers

  1. How do I quit gracefully without burning bridges I will need as a founder?

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