Employee stock options

I would like to understand how one can go about designing a stock option plan for employees?

Assuming a startup environment where there are cashflow constraints, how much of the equity should be kept aside by the promoters to offer to employees and what would be the various compliances w.r.t with respect to ROC, Companies Act and Income-tax .

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Hi Akshar,

The industry practice is to set aside the equity in a range of 10-20% and the proportion can be decided by the Founders for the Company’s key personnel, hierarchy.

As far as the designing and drafting an ESOP policy, agreement, and its compliance with the appropriate statutory bodies are concerned it will require an appropriate legal consultation.

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would you know someone who would help me with this ?

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Hi Akshar,

Thanks for joining the community and for your valuable conversation, which helps thousands of others with the same queries.

We would love to help you with more advice / guidance if required, but considering the ‘Community Guidelines’ we restrict sharing any 3rd party promotions, contacts and other personal informations inside our community.

So at this moment we might not be able to share any such info in the forum. But as said please do get back to the community, if you need any heads up to kick start with the process or with FAQ’s if any. Thanks again :slight_smile:

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Thanks Dinesh. Noted this.

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Thanks for the help Bhuvana

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