Company Secretary
Step-by-step guide to ESOP approvals in India: what board and shareholder resolutions must include, Rule 12 disclosures, grant procedures, and drafting pitfalls to avoid.
Every ESOP in India must comply with Rule 12 of the Companies Act. Learn how startups can legally approve, file, and report ESOPs — from MGT-14 to PAS-3 and valuation.
Employee Stock Option Plans (ESOPs) in India are governed by Section 62(1)(b) of the Companies Act, 2013 and Rule 12 of the Share Capital and Debentures Rules, 2014. This guide explains how private companies must structure, approve, and file ESOPs under the MCA V3 portal in 2025. It covers board and shareholder approvals, filing forms like MGT-14 and PAS-3, and maintaining Form SH-6. The article also highlights compliance mistakes startups commonly make and how to avoid them during audits and funding rounds. Perfect for founders, CFOs, and company secretaries seeking a clear understanding of ESOP legal compliance in India.
