Now Startup companies Can grant stock ownership to their employees

The administration has now permitted the startups to give ESOPs for example Representative Stock Ownership Plans to their workers for a time of 10 years from their registration as a startup. 

This is one of the Government Policies to energize startup development and business. Prior, the breaking point to give ESOPs or offers to the representatives was till 5 years of the Startup India registration. 

Which entities can give ESOPs? 

According to the MCA's as of late presented Companies Amendment Rules 2020:- 

• Those organizations that qualify as 'startups' as per the Department for Promotion of Industry and Internal Trade (DPIIT) 2019 strategy will be qualified. 

• For this, they need to obtain Startup India registration. 

• Also, the settled up capital of the startup ought to be in any event 15% while giving perspiration value. 

Why the Govt has permitted startups to grant ESOPs? 

As we probably are aware, COVID-19 has upset the ordinary course of business. Numerous startups are confronting the issue of liquidity mash in the market, 

• This can be clear from the current cutbacks of laborers, and compensation cuts. 

• In such a circumstance, the startups regularly issue ESOPs to draw in their representatives with them. 

ESOPs fill in as an advantage for the representatives and gives them trust that it will be a rewarding offer later on.