ESOP Vesting and Forfeiture Tracking

Options vest every month, employees come and go, and each event has to be recorded, notified and reflected in your SH-6 register, or your cap table quietly drifts out of truth. Patron Accounting tracks it for you on a subscription basis: monthly vesting milestones, forfeiture events recorded in SH-6, employee notifications, and automated alerts for upcoming vesting.

An ESOP is not a one-time event; it is a living schedule. Every month options vest, and every time someone leaves, options are forfeited. If those events are not tracked and recorded as they happen, the gap is discovered later, in an audit or a funding round, when reconstructing it is painful. This service keeps the schedule and the register accurate continuously.

Content is reviewed quarterly for accuracy.

Every event we track is reflected in your SH-6 register, so the statutory record and the live schedule never diverge:

• Monthly vesting milestones: we track each tranche as it vests, employee by employee.
• Forfeiture events: we record unvested options forfeited on each leaver.
• SH-6 entries: we post grants, vesting, exercise and forfeiture with dates and causes.
• Employee notifications: we notify employees when their options vest.
• Upcoming-vesting alerts: we send reminders ahead of vesting and exercise dates.
• Pool reconciliation: we keep granted, vested and forfeited tied to the pool.

Forfeiture is where most tracking errors happen, because it is triggered by people leaving rather than by the calendar.

Each forfeiture must be recorded in SH-6 with the date and cause, and the forfeited options returned to the pool so it reconciles. We capture the leaver event, apply the scheme's good-leaver or bad-leaver terms, and post the entry, so nothing is missed and the pool is always correct.

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 Vesting Tracking 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 tracking ESOP vesting, forfeitures and SH-6 records for Indian companies.

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

This works hand in hand with our ESOP SH-6 register administration service: tracking feeds the events, the register administration maintains the statutory book. Both sit within our ESOP management and compliance services.

Exercises run through issue of shares, the perquisite TDS through payroll services, and the records support your secretarial audit and statutory audit. See also the full ESOP services hub.

Vesting: under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014, there must be a minimum of one year between grant and vesting; the scheme sets the full vesting schedule and the treatment of options on separation.

Forfeiture: unvested options lapse or are forfeited on separation as the scheme provides, and vested options are exercisable only within the scheme's post-termination window, after which they may lapse.

SH-6 register: Rule 12(10) requires the company to maintain the Form SH-6 register recording all grants, vesting, exercise, lapse and forfeiture; it is not filed with the MCA but must be available for inspection in audits and diligence.

Non-compliance: failure to maintain the register or comply with Rule 12 can attract penalties under the Companies Act, alongside the reputational and trust cost of inaccurate records.

Authoritative sources: the Ministry of Corporate Affairs (Rule 12, SH-6, Section 450), the Companies Act and Share Capital Rules, and the Income Tax Department (perquisite at exercise, capital gains).

The cost of not tracking is invisible until it is not: a year of unrecorded vesting and forfeitures surfaces in an audit or a due-diligence exercise, where reconstructing it is slow, expensive and reputationally awkward, and where a pool that does not reconcile raises real questions. Tracking continuously, for a modest annual fee, means the record is always right and there is never a reconstruction to do. Keep the schedule and register live, not retrospective.

Vesting and forfeiture are the moving parts of every ESOP, and keeping them tracked, recorded and communicated is what keeps the scheme accurate, compliant and trusted.

Patron Accounting LLP, a CA and CS firm with 15+ years of ESOP experience, runs this as an affordable annual subscription, tracking vesting milestones, recording forfeitures in SH-6, alerting the company and notifying employees, so your records stay live and audit-ready, and pairs it with full register administration and management whenever you need more.