Govt allows startups to issue ESOPs till 10 years after incorporation

Govt allowed startups to issue stock options or ESOPs to their employees for up to 10 years from their registration year. Earlier, the limit to issue these shares was till 5 years.

According to the Ministry of Corporate Affairs’ Companies Amendment Rules 2020, all those companies that qualify as startups under the Department for Promotion of Industry and Trade’s 2019 policy would be eligible.

Also, while issuing sweat equity, the paid-up capital of startups should not fall below 15%, the notification added.

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