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REGARDING ESOP TO DIRECTORS HOLDING MORE THAN 10% SHARES

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pankaj

chartered accountant

23 Points Posted on 20 November 2020

A private limited company wants to give ESOP to director who is also shareholder holding more than 10 % shares. However, as per plain reading of companies act, 2013, company can not provide ESOP to such director. whether there is any way through which company can provide such option to its directors????

Replies (2)

Quick Summary

A private limited company is seeking ways to grant Employee Stock Option Plans (ESOPs) to a director who also holds more than 10% of the company's shares. Current interpretations of the Companies Act, 2013, suggest this is not permissible, as directors holding a significant stake (directly or indirectly) are ineligible for ESOS. This discussion aims to identify potential avenues or solutions to enable such an ESOP grant.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 20 November 2020

A director who either by himself or through his relative or through any body corporate, directly or indirectly holds more than 10% of the outstanding equity shares of the company shall not be eligible to participate in the ESOS.