ESOP Policy Drafting and Scheme Document

You have decided your option pool, vesting and pricing; what you need now is a proper, compliant scheme document that will stand up at the board, the general meeting and in diligence. Patron Accounting drafts your ESOP scheme and policy document as a standalone engagement: a CA and CS-attested document built on Section 62 and Rule 12, ready to approve and administer.

This is a focused, document-first engagement. Many companies work out the commercial design themselves, the pool size, vesting, who gets how much, but then need a properly drafted, legally compliant scheme document to actually adopt it. That is exactly what we deliver here, without the full design retainer, though we can expand into that if you want it.

Content is reviewed quarterly for accuracy.

Rule 12 sets out the disclosures the scheme and the general-meeting notice must carry. Our drafted document covers all of them:

• Total options: the total number of options or the option pool authorised under the scheme.
• Eligible employees: the classes of employees and directors who may receive options.
• Vesting: vesting requirements, the vesting period and the maximum vesting period.
• Exercise price: the exercise price or the formula for arriving at it.
• Exercise period: the exercise window and the process to exercise.
• Lapse and forfeiture: when options lapse, and the leaver treatment.
• Limits: the maximum options per employee and in aggregate.
• Valuation and accounting: the valuation method and a statement on the accounting standards.

Mandatory terms: the document must build in the minimum one-year gap between grant and vesting, set how the board fixes the exercise price, and confirm that employees gain no shareholder rights until they exercise.

A scheme document is only useful if it gets through the board and the general meeting cleanly. We draft it to slot straight into the approval process.

• AoA check: the Articles must authorise ESOP issuance; if silent, an EGM is needed to amend them, which we flag and can combine with the scheme-approval meeting.
• Board and special resolution: the board approves the draft, then shareholders approve it by special resolution (an ordinary resolution may suffice for a private company under the MCA exemption).
• Filings: MGT-14 is filed within 30 days of the resolution, with PAS-3 on allotment after exercise.
• The notice disclosures: we prepare the explanatory statement with the Rule 12 disclosures annexed to the general-meeting notice.

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free ESOP Scheme Document Drafting consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

10,000+ Businesses | 4.9 Google Rating | 50,000+ Documents Processed | 15+ Years

Patron Accounting LLP is a CA and CS firm with 15+ years drafting ESOP schemes and policy documents for startups and established companies.

With offices in Pune, Mumbai, Delhi and Gurugram, Patron Accounting serves businesses across India, both in-person and remotely.

This is the document-first entry point to our ESOP management and compliance services, which cover the full lifecycle once the scheme is adopted. If you still need the design itself, see our ESOP scheme design, and grants are issued via issue of shares.

DPIIT startups should pair this with startup registration, and the governance sits alongside secretarial audit and private limited company compliance. Valuation is supported by our actuarial valuation services. See also the full ESOP services hub.

Authority: Section 62(1)(b) of the Companies Act, 2013 authorises a company to issue shares to employees under an ESOP scheme approved by a special resolution in a general meeting.

Rule 12: Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 prescribes who is eligible, the disclosures the scheme and notice must carry, the minimum one-year vesting, and the SH-6 register requirement.

Filings: MGT-14 must be filed within 30 days of the special resolution, and PAS-3 on allotment of shares after exercise.

Listed companies: a listed company's scheme must additionally comply with the SEBI Share Based Employee Benefits and Sweat Equity Regulations, 2021, with their own disclosure and approval requirements.

Authoritative sources: the Ministry of Corporate Affairs (Section 62, Rule 12, MGT-14, PAS-3), the Companies Act and Share Capital Rules bare text, SEBI (SBEB and Sweat Equity Regulations), and Startup India / DPIIT (startup ESOP relaxations).

The scheme document governs every grant you make, so a flaw in it is a flaw in all of them, and it surfaces at the worst time, in a funding round or an acquisition where investors read the scheme closely. Drafting it properly before you grant, rather than fixing it under deal pressure later, is far cheaper and cleaner. Get the document right at the start, and your ESOP rests on a sound legal foundation for its whole life.

The ESOP scheme document is the legal backbone of your option plan, and a compliant, well-drafted one is what makes every grant valid and every exit clean.

Patron Accounting LLP, a CA and CS firm with 15+ years of ESOP drafting experience, prepares your scheme and policy document as a focused standalone deliverable, with all the Rule 12 disclosures, the resolutions and templates, attested and approval-ready, and stands ready to take on full administration when you need it.