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		<title>Private Limited Company Registration in Kolkata Via Online Method</title>
		<link>https://muds.co.in/private-limited-company-registration-in-kolkata-via-online-method/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Tue, 03 May 2022 08:52:16 +0000</pubDate>
				<category><![CDATA[Consulting]]></category>
		<category><![CDATA[Debt Recovery]]></category>
		<category><![CDATA[Directors Disqualification]]></category>
		<category><![CDATA[disqualification of directors]]></category>
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		<category><![CDATA[ESOP]]></category>
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		<category><![CDATA[insolvency education]]></category>
		<category><![CDATA[insolvency process]]></category>
		<category><![CDATA[Insolvency professional]]></category>
		<category><![CDATA[Insolvency Resolution]]></category>
		<category><![CDATA[Insolvency Resolution Process]]></category>
		<category><![CDATA[lost shares]]></category>
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					<description><![CDATA[<p>Private Limited Company Registration in Kolkata&#160; In this post, we’ll look at how to register a business in Kolkata. Company registration is a procedure through which all businesses are registered on the MCA’s website (Ministry of Corporate Affairs). The Company Registration in Kolkata is a simple procedure, but it requires numerous procedures to complete. A [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/private-limited-company-registration-in-kolkata-via-online-method/">Private Limited Company Registration in Kolkata Via Online Method</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></description>
										<content:encoded><![CDATA[<h2>Private Limited Company Registration in Kolkata&nbsp;</h2>
<p>In this post, we’ll look at how to register a business in Kolkata. Company registration is a procedure through which all businesses are registered on the MCA’s website (Ministry of Corporate Affairs). The Company Registration in Kolkata is a simple procedure, but it requires numerous procedures to complete.</p>
<p>A Private Limited Company offers its stockholders legal protection and limited liability. A privaely held limited firm must have at least positions two working directors. A person can be both a director and a shareholder in a Private Limited Company. After receiving a Certificate of Incorporation, a Private Limited Company (PLC) can begin operations. Within 15 days following its application, a PLC can be implemented.</p>
<p>As a result, we will concentrate on the advantages and procedures of forming a Private Limited Company registrationin Kolkata in this post.</p>
<h2 data-fontsize="20" data-lineheight="24"><b>Advantages of forming a private firm company registration in Kolkata</b></h2>
<ol>
<li aria-level="1">A private limited company might have anything from two to fifty directors.</li>
<li aria-level="1">It is a legal autonomous body.</li>
<li aria-level="1">Directors have limited liability and are not directly responsible for the company’s operations.</li>
<li aria-level="1">Directors are only partially liable to creditors.</li>
<li aria-level="1">In the event of a default, the bank or creditors will sell the company’s assets rather than personal property.</li>
<li aria-level="1">The directors are eligible for tax benefits.</li>
<li aria-level="1">Suing or being sued in the name of a registered corporation is possible.</li>
<li aria-level="1">Companies that are registered have a higher chance of borrowing money.</li>
</ol>
<h2><b>Company Registration in Kolkata: Private Company Incorporation Checklist</b></h2>
<ul>
<li aria-level="1"><b>Directors:</b>&nbsp;For private company registration in Kolkata, a minimum of two directors is required, with one of them being a resident director.</li>
<li aria-level="1"><b>The investment</b>&nbsp;must be made in accordance with the business type, and there is no minimum capital investment necessary for a firm.</li>
<li aria-level="1">Inventive business name: The name of the firm must not be identical or confusingly similar to that of another company.</li>
<li aria-level="1"><b>Registered address:</b>&nbsp;Every business should have one.</li>
</ul>
<h2><b>Steps for Incorporation of the Company</b></h2>
<p><i>The following are the stages of forming a business using the RUN form:</i></p>
<ol>
<li aria-level="1"><i>After that, create a login account and log in.</i></li>
<li aria-level="1"><i>Enter the name you want to use and cross-reference it with the MCA database.</i></li>
<li aria-level="1"><i>If an established business wants to reverse its name, a CIN will be requested through the RUN e- form.</i></li>
<li aria-level="1"><i>The applicant must specify the name that he or she wishes to keep on file in case the firm’s name is changed or a new company is formed.</i></li>
<li aria-level="1"><i>Then he or she must submit the prospective company’s objects as well as any additional documents in support of the suggested name.</i></li>
</ol>
<h3><b>Limited Name Validity</b></h3>
<ul>
<li aria-level="1">For a new corporation, an authorised name is valid for 20 days from the date of approval.</li>
<li aria-level="1">60 days after the date of authorization for changing the name of an established corporation.</li>
</ul>
<h2><b>Steps for Private Company Registration in Kolkata</b></h2>
<h3><b>Step 1: Obtain DSC</b></h3>
<p>Because the process is online, a digital signature is required for the incorporation of a private limited company. Members and executives must have a legitimate Class II or Class III DSC.</p>
<h3><b>Step 2: Fill out an application for a DIN number.</b></h3>
<p>A directors must have a DIN and must apply for one on MCA if he does not already have one. A DIN number can be used to become a director in many&nbsp;<a href="https://timesofindia.indiatimes.com/blogs/voices/retrieve-your-lost-and-unclaimed-investment-made-in-shares-and-find-lost-shares-and-understand-the-process-of-recovering-them/?fbclid=IwAR2_cdzzvVYRtdMtNZw5qhHOwkPftQPP2kpDmj0358shoGMjcALSXi4pPY0">businesses</a>.</p>
<h3><b>Step 3: Submit an application for name approval</b></h3>
<p>At the time of establishment, the company’s name, as well as SPICe (INC-32) must be submitted for approval. If the name is rejected, it can be resubmitted.</p>
<h3><b>Step 4:&nbsp;</b>e-MoA (INC-33) and e-AoA are the fourth and final steps (INC-34)</h3>
<p>Previously, MoA and AoA had to be filed physically, but now they must be filed online on the MCA website. These papers must be digitally signed by the subscribers.</p>
<h3><b>Step 5: PAN and TAN applications</b></h3>
<p>After all of the paperwork have been completed, the applicant should consider applying for a PAN and TAN.</p>
<h3><b>Step 6: Certificate of Incorporation&nbsp;</b></h3>
<p>MCA &amp; RoC will analyse all of the documentation and issue a Certificate of Incorporation if they are pleased. The Certificate of Incorporation is a legal document that grants the firm legal standing.</p>
<h3><b>7th Step: Open bank Accounts</b></h3>
<p>The firm must create a bank account for any transactions in its name after receiving the certificate of incorporation.</p>
<p><b>In order to register a company in Kolkata, you’ll need the following documents</b></p>
<p>Documents required for company registration&nbsp; in Kolkata:</p>
<ol>
<li aria-level="1">For DSC&nbsp;</li>
<li aria-level="1">DIN (Director Identification Number)</li>
<li aria-level="1">Incorporation of a Business</li>
</ol>
<h2><b>In the case of DSC,</b></h2>
<ol>
<li aria-level="1">Along with the DSC application form, the following papers must be forwarded:</li>
<li aria-level="1">The claimant’s photograph (to be stamped across with a blue pen)</li>
<li aria-level="1">The director’s address proof (s)</li>
<li aria-level="1">Id Proof (<a href="https://muds.co.in/process-for-name-change-in-pan-card/">Pan Card</a>) of the applicant Passport Aadhar card Driving licence Voter Id card Email Id and contact number (for each director)</li>
</ol>
<h2><b>DIN</b></h2>
<p>Fill out the e-form DIR -3, which is available on the MCA website. Alongside Form DIR -3, attach the supporting information:</p>
<ol>
<li aria-level="1">Id proof photo of the applicant (attested)</li>
<li aria-level="1">Proof of address (attested)</li>
<li aria-level="1">Make the payment as directed. The only way to pay is on the internet.</li>
<li aria-level="1">There will be a preliminary DIN created.</li>
<li aria-level="1">A preliminary DIN becomes an authorised DIN after verification.</li>
</ol>
<ul>
<li aria-level="2">For a Firm’s Registration</li>
<li aria-level="2">The Firm’s Title</li>
<li aria-level="2">The firm’s assets</li>
<li aria-level="2">Investors’ list</li>
<li aria-level="2">The director’s Id proof is the company’s purpose (s)</li>
</ul>
<ol>
<li aria-level="1">Aadhar card and passport</li>
<li aria-level="1">Id cards for voters and driver’s licence</li>
<li aria-level="1">Director’s proof of residence (s)</li>
<li aria-level="1">Bank statement Telephone bill</li>
<li aria-level="1">The cost of electricity</li>
<li aria-level="1">Mobile phone bill (not old than two months)</li>
<li aria-level="1">INC-9 Director(s) Consent (form DIR-2) (Affidavit)</li>
</ol>
<ul>
<li aria-level="1">Proof of the registered office’s address</li>
</ul>
<ol>
<li aria-level="1">Bills of Gas,&nbsp;</li>
<li aria-level="1">Phone, and</li>
<li aria-level="1">Electricity</li>
</ol>
<p>If the office is included in the lease, the lease agreement and a letter of authorization from the owner are required.</p>
<h2><b>Holders of DINs declare themselves</b></h2>
<p>A Private Limited&nbsp;<a href="https://muds.co.in/company-registration-2/">Company Registration</a>&nbsp;in Kolkata is an online operation that should be completed with caution, and once completed, the directors are entitled to all of the privileges of a Private Limited Company.</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/private-limited-company-registration-in-kolkata-via-online-method/">Private Limited Company Registration in Kolkata Via Online Method</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></content:encoded>
					
		
		
			</item>
		<item>
		<title>New Monetary Policy 2022: Repo Rate Remained Unchanged</title>
		<link>https://muds.co.in/new-monetary-policy-2022-repo-rate-remained-unchanged/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Tue, 03 May 2022 08:23:53 +0000</pubDate>
				<category><![CDATA[Consulting]]></category>
		<category><![CDATA[Corporate Insolvency Resolution Process]]></category>
		<category><![CDATA[Debt Recovery]]></category>
		<category><![CDATA[Directors Disqualification]]></category>
		<category><![CDATA[disqualification of directors]]></category>
		<category><![CDATA[Disqualifications of Directors]]></category>
		<category><![CDATA[disqualified directors]]></category>
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		<category><![CDATA[ESOP]]></category>
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		<category><![CDATA[Insolvency and Bankruptcy code]]></category>
		<category><![CDATA[insolvency education]]></category>
		<category><![CDATA[insolvency process]]></category>
		<category><![CDATA[Insolvency professional]]></category>
		<category><![CDATA[Insolvency Resolution]]></category>
		<category><![CDATA[lost shares]]></category>
		<category><![CDATA[Micro Financing]]></category>
		<category><![CDATA[NBFC]]></category>
		<category><![CDATA[NBFC Incorporation]]></category>
		<category><![CDATA[nbfc registration]]></category>
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		<category><![CDATA[posh act]]></category>
		<category><![CDATA[posh act 2013]]></category>
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		<category><![CDATA[process to claim shares from iepf]]></category>
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		<guid isPermaLink="false">https://muds.co.in/?p=13891</guid>

					<description><![CDATA[<p>New Monetary Policy 2022 Releases from the RBI Monetary Policy 2022 Meeting: The six-member Monetary Policy 2022 Committee (MPC), led by Reserve Bank of India (RBI) Governor Shaktikanta Das, maintained the repo rate at 4% and the reverse repo rate at 3.35 % intact. Here’s what the governor of India’s central bank said. RBI Monetary [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/new-monetary-policy-2022-repo-rate-remained-unchanged/">New Monetary Policy 2022: Repo Rate Remained Unchanged</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></description>
										<content:encoded><![CDATA[<h1>New Monetary Policy 2022</h1>
<p>Releases from the RBI Monetary Policy 2022 Meeting: The six-member Monetary Policy 2022 Committee (MPC), led by Reserve Bank of India (RBI) Governor Shaktikanta Das, maintained the repo rate at 4% and the reverse repo rate at 3.35 % intact. Here’s what the governor of India’s central bank said.</p>
<p><b>RBI Monetary Policy 2022: The Reserve Bank of India’s (RBI) Monetary Policy 2022 Committee (MPC) retained the repo rate at 4% for the 11th straight approach achieves a ‘affiliative posture,’ according to RBI Governor Shaktikanta Das on Friday.</b></p>
<p><b>The MPC decided unanimously to continue the accommodating approach, according to the central bank governor, and the reverse repo rate was also remained steady at 3.35 percent.</b></p>
<p>The Marginal Standing Facility (MSF) rates and the lending rate were likewise held steady at&nbsp;<b><i>4.25 percent.</i></b></p>
<p>On May 22, 2020, the RBI reduced its policy repo rate, or short-term lending rate, in an off-policy cycle to boost demand by decreasing interest rates to a historic low.</p>
<p>In a press conference following the Monetary Policy 2022 meeting, Das stated that the RBI will return the liquidity adjustment facility (LAF) corridor to 50 basis points (bps), as it was pre-Covid. The MSF rate and the bank rate remain at 4.25 percent.</p>
<p><b><i>“It also agreed to remain accommodating while concentrating on withdrawal of accommodation to ensure that inflation remains within the goal moving ahead, while encouraging expansion,”&nbsp;</i></b></p>
<p>-he added on the central bank’s attitude.</p>
<p>” It will continue to be part of the RBI’s toolbox, and its use will be at the discretion of the RBI for objectives that are indicated from time to time. The FRRR, in conjunction with the SDF, will increase the flexibility of the RBI’s liquidity management framework.”</p>
<p>The RBI reduced its growth prediction for the current fiscal year to 7.2 percent from 7.8 percent previously, while increasing its inflation forecast to 5.7 percent from 4.5 percent.</p>
<p>He went on to say that, given the inordinate volatility in international oil prices as of early February, as well as the extreme uncertainty surrounding the evolving geopolitical tensions, any projection of growth and inflation is fraught with risk, and is largely dependent on future oil and commodity price developments.</p>
<p>Das addressed liquidity and financial market circumstances in his speech, stating that the RBI will continue to take a sophisticated and agile approach to liquidity risk management while preserving appropriate liquidity in the system.</p>
<p>“At the moment, liquidity management is distinguished by two procedures: variable rate reverse repo (VRRR) bids of varied maturities to swallow liquidity, and variable rate repo (VRR) auctions to fill temporary liquidity problems and offset anomalies.” “We will keep taking this strategy,” he stated.</p>
<h2 data-fontsize="20" data-lineheight="24"><b>ATM cash withdrawal without a card that is interoperable</b></h2>
<p>In an effort to combat fraud, the Reserve Bank of India agreed on Friday to allow all banks to use card-less cash withdrawal through ATMs. Currently, card-less cash withdrawal via ATMs is a permissible form of transaction allowed by a few banks in the nation on an as-needed basis (for their customers at their own ATMs).</p>
<h3><b>Economic experts and market analysts reacted as follows:</b></h3>
<ul>
<li aria-level="1">The severe reduction in GDP forecasts for FY23 and significant increase in inflation expectations for FY23 might suggest some tightening measures in the future, which would be supported by the shift in posture to focus on withdrawal of accommodation. Current geopolitical developments, supply chain concerns, and commodity price increases are tying the RBI’s hands and pushing it to progressively turn hawkish, despite its desire to maintain its pro-growth perspective. The 10-year Gsec yield has increased to 7%, showing the street’s worry over the massive borrowing programme in the face of rising interest rates.”</li>
<li aria-level="1">“Retaining the repo rate at 4% and the reverse repo rate at 3.35 percent, continuing with the accommodating posture on expected lines,” said V K Vijayakumar, Chief Investment Strategist at Geojit&nbsp;<a href="https://muds.co.in/">Financial Services</a>. Recognizing the new reality of increased petroleum prices caused by the war, the RBI cut the FY23 GDP growth rate prediction to 7.2 percent from 7.8 percent before and upped the FY23 CPI inflation projection to 5.7 percent from 4.5 percent previously. This is predicated on the premise that crude will be $100 per barrel. This suggests that if crude falls considerably, which is likely if the conflict ends soon, GDP and inflation will improve.The opposite might be true if the battle escalates and petroleum prices rise well beyond $100. The Governor correctly underscored India’s macroeconomic fundamentals, noting to an improvement in the external position aided by record exports, large foreign reserves of $608 billion, and banking sector development. The SDF (Standing Deposit Facility) is a new mechanism established by the central bank to absorb liquidity.&nbsp;</li>
</ul>
<p>“The recent RBI Monetary Policy 2022 did not include any surprises,” stated Nish Bhatt, Founder &amp; CEO of Millwood Kane International, “it held rates constant for the 11th straight policy.” However, it has clearly outlined the road to policy unwinding. The emphasis will now be on withdrawing the accommodating policy stance in order to keep inflation under control. The&nbsp;<a href="https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53601">RBI’s statement today</a>&nbsp;plainly suggests the end of loose Monetary Policy 2022, which is reflected in the 10-year benchmark yield, which has reached a multi-year high.&nbsp;The unwinding of liquidity will cause some instability, and it is expected that the RBI would drop the growth rate prediction for FY23 to 7.2 percent, with the inflation target raised to 5.7 percent from 4.5 percent previously. The explicit goal of central banks throughout the world is to manage inflation, unwind lose money, and concentrate on gradual and steady development.“</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/new-monetary-policy-2022-repo-rate-remained-unchanged/">New Monetary Policy 2022: Repo Rate Remained Unchanged</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></content:encoded>
					
		
		
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		<item>
		<title>POSH Act: ALL ABOUT THE SEXUAL HARASSMNET LAW IN INDIA</title>
		<link>https://muds.co.in/posh-act-all-about-the-sexual-harassmnet-law-in-inida/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Tue, 03 May 2022 07:03:53 +0000</pubDate>
				<category><![CDATA[PoSH]]></category>
		<category><![CDATA[Debt Recovery]]></category>
		<category><![CDATA[Directors Disqualification]]></category>
		<category><![CDATA[disqualification of directors]]></category>
		<category><![CDATA[disqualified directors]]></category>
		<category><![CDATA[Employee Stock Option Plan]]></category>
		<category><![CDATA[ESOP]]></category>
		<category><![CDATA[iepf]]></category>
		<category><![CDATA[Insolvency and Bankruptcy code]]></category>
		<category><![CDATA[insolvency education]]></category>
		<category><![CDATA[insolvency process]]></category>
		<category><![CDATA[Insolvency professional]]></category>
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		<category><![CDATA[posh act]]></category>
		<category><![CDATA[posh act 2013]]></category>
		<category><![CDATA[posh law]]></category>
		<category><![CDATA[Preference Shares]]></category>
		<category><![CDATA[process to claim shares from iepf]]></category>
		<category><![CDATA[Recovery of Bad Debt]]></category>
		<category><![CDATA[Recovery of Debt]]></category>
		<category><![CDATA[recovery of shares]]></category>
		<category><![CDATA[recovery of shares from IEPF]]></category>
		<category><![CDATA[removal of director]]></category>
		<category><![CDATA[removal of director disqualification]]></category>
		<category><![CDATA[removal of directors disqualification]]></category>
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		<category><![CDATA[SEBI]]></category>
		<category><![CDATA[sexual harassment of women at workplace]]></category>
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					<description><![CDATA[<p>POSH Act: ALL ABOUT THE SEXUAL HARASSMENT LAW&#160; Sexual harassment law:&#160;The word “workplace” confers to the Sexual&#160;harassment at workplace&#160;of Women at Workplace (Regulation, Prevention, and Redressal) Posh Act of 2013, and specifically includes: All offices or other locations where the Company does business. All Company-related activities undertaken at any other place that is not the [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/posh-act-all-about-the-sexual-harassmnet-law-in-inida/">POSH Act: ALL ABOUT THE SEXUAL HARASSMNET LAW IN INDIA</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></description>
										<content:encoded><![CDATA[<h2>POSH Act: ALL ABOUT THE SEXUAL HARASSMENT LAW&nbsp;</h2>
<p><b>Sexual harassment law:</b>&nbsp;<b><i>The word “workplace” confers to the Sexual&nbsp;</i></b><b>harassment at workplace</b><b><i>&nbsp;of Women at Workplace (Regulation, Prevention, and Redressal) Posh Act of 2013, and specifically includes:</i></b></p>
<div class="post-content">
<ol>
<li>All offices or other locations where the Company does business.</li>
<li>All Company-related activities undertaken at any other place that is not the Company’s premises and is under the authority of the employers.</li>
<li>Any social, business, or other activities and/or events, seminars, or corporate gatherings where the behavior and/or commencements may have a negative influence on working women workers participating in the event.</li>
</ol>
<h2><b>HOW TO PREVENT SEXUAL HARRASSMENT</b></h2>
<p>Sexual harassment law prevention—</p>
<p>(1) No woman shall be exposed to sexual harassment in any job.</p>
<p>(2) If any of the below events take place, are presented in conjunction with, or are connected to any act or behavior of gender based violence, they may be considered sexual assault:</p>
<ul>
<li aria-level="1">Inferred or clear and specific assure of favorable treatment in her workplace;</li>
<li aria-level="1">Inferred or imminent threat of harassment at workplace and discrimination in her workplace;&nbsp;</li>
<li aria-level="1">Inferred or actual assault about her current or future job status; or&nbsp;</li>
<li aria-level="1">Intervention with her job role or creation of a threatening, objectionable, or hostile work environment for her; or</li>
<li aria-level="1">Mortifying treatment likely to damage her safety and wellbeing</li>
</ul>
<p>All Group/Company personnel have a personal duty to ensure that their actions do not violate this policy. All workers are asked to underline the importance of maintaining a sexual harassment at workplace-free workplace.</p>
<h4><b>Grievance Procedure:&nbsp;</b></h4>
<p>In the Company/Group, a suitable complaint mechanism in the form of a “Internal Complaints Committee” (ICC) has been established for the timely redress of the victim employee’s complaint.</p>
<h2><b>ESTABLISHMENT OF INTERNAL COMPLAINTS COMMITTEE (ICC):</b></h2>
<p>All personnel at the site who are covered by the committee are informed of the committee’s details (workplace).</p>
<h3><b><i>Each location’s committee consists of the following individuals:</i></b></h3>
<ul>
<li aria-level="1">A woman in a top position in the company or workplace serves as the presiding officer.</li>
<li aria-level="1">At least two staff who are devoted to the cause of women and/or have legal expertise;</li>
<li aria-level="1">One representative from a non-governmental group or association dedicated to the cause of women, or a person knowledgeable about sexual harassment concerns.</li>
</ul>
<h3><b>The Internal Complaints Committee is in charge of the following:</b></h3>
<ul>
<li aria-level="1">Receiving sexual harassment at workplace allegations in the workplace.</li>
<li aria-level="1">Initiating and conducting an investigation in accordance with the Act’s stated procedure.</li>
<li aria-level="1">Inquiry results and suggestions are submitted.</li>
<li aria-level="1">collaborating with the employer to put necessary measures in place.</li>
<li aria-level="1">Following the established policy of maintaining tight secrecy throughout the process.</li>
<li aria-level="1">Discourage and prevent sexualharassment at workplace.</li>
</ul>
<h2><b>PROCEDURES FOR RESOLVING, SETTLING, OR PROSECUTING SEXUAL HARASSMENT LAW:</b></h2>
<p>As follows, the Company is dedicated to creating a supportive atmosphere for resolving sexual harassment complaints:</p>
<ol>
<li aria-level="1">When an episode of sexual harassment happens, the victim of such conduct can instantly convey their displeasure and concerns to the harasser, as well as urge that the harasser act respectfully. If the harassment continues, or if the victim feels uncomfortable confronting the harasser directly, the victim may submit their concerns to the Internal Complaints Committee (ICC) for resolution of their issues. Following that, the Internal Complaints Committee will give advise or assistance as needed, as well as conduct a quick investigation to settle the situation.</li>
</ol>
<p>&nbsp;</p>
<h3><b>Charge under sexual harassment law</b></h3>
<ol>
<li>An employee with a harassment complaint who is uncomfortable with or has exhausted the informal settlement alternatives may file a formal complaint with the Presiding Officer of the Management’s Internal Complaints Committee. Any aggrieved woman may file a complaint of sexual harassment at work with ICC within 3 (three) months of the date of the incident, or in the case of a series of incidents, within 3 (three) months of the last incident, and ICC may, for reasons to be recorded in writing, extend the time limit not exceeding three months if the circumstances of the case are satisfied.</li>
<li>In the event that such a complaint cannot be made in writing, the Presiding Officer or any&nbsp;<a href="https://muds.co.in/composition-and-duties-of-the-internal-complaints-committee/">member of the ICC</a>&nbsp;shall provide the woman with all reasonable help in writing the complaint.</li>
<li>Before launching an investigation under Section 11 of the Posh Act, the ICC may, at the request of the aggrieved woman, attempt to resolve the matter through conciliation, provided that no monetary settlement is made as a basis for conciliation, and where a settlement is reached, the ICC shall record the settlement and forward it to the employer for action as specified in the recommendation. Following that, the ICC will send the aggrieved ladies and the respondent with copies of the settlement as recorded, and no further investigation will be done.</li>
<li>If the aggrieved woman notify the ICC under the&nbsp;<a href="https://muds.co.in/posh-act-2013-sexual-harassment-women-workplace/">posh act</a>&nbsp;that any term or condition of the settlement reached under Section 10 (2) has not been met by the respondent, the ICC shall conduct an investigation or, as the case may be, forward the complaint to the police, and for the purpose of conducting an investigation, the ICC shall have the same powers as a Civil Court when trying a suit under the Code of Civil Procedure, 1908.</li>
<li>The ICC must finish the investigation under Section 11(1) within 90 days.&nbsp;</li>
</ol>
<h3><b>Any of the following can be used as a basis for disciplinary action:</b></h3>
<ol>
<li>Formal sincerely apologise;&nbsp;</li>
<li>Reduction to a lower grade;&nbsp;</li>
<li>Written warning with a copy kept in the employee’s file;&nbsp;</li>
<li>Suspension or termination of promotion for two years or more depending on the sensitivity of the case;&nbsp;</li>
<li>Any other appropriate disciplinary action as deemed</li>
</ol>
<h3><b>1. Report of the Inquiry under the sexual harassment law:</b></h3>
<p>The ICC must provide the inquiry report to the parties concerned within 10 days after the conclusion of the investigation.</p>
<h3><b>2. Penalties For False Or Intentionally False Complaints And False Evidence:</b></h3>
<p>If the ICC determines that the complainant made the complaint knowing it was false or produced any forged or misleading document, it may advise the employer to take action against the aggrieved women or the person who made the complaint with wrongful intent, as the case may be, in accordance with the provisions of the services rules applicable to her or him or, if no such service rules exist, in accordance with the provisions of the services rules applicable to her or him.</p>
<h3><b>3. Penalties for Making a False Or Malicious Complaint and Providing False Evidence:</b></h3>
<p>If the ICC determines that the complainant made the complaint knowing it was false or produced any forged or misleading document, it may advise the employer to take action against the aggrieved woman or the person who made the complaint with wrongful intent, as the case may be, in accordance with the provisions of the rules of the service applicable to her or him, or where no such service rules exist, in such a matrimonial situation.</p>
<h3><b><i>Annual report preparation: It must include the following information:</i></b></h3>
<ol>
<li>a) The number of sexual harassment complaints received each year;&nbsp;</li>
<li>b) The number of complaints resolved each year;</li>
<li>c) The number of cases pending for more than 90 days;&nbsp;</li>
<li>d) The number of workshops held to raise awareness about sexual harassment at workplace;&nbsp;</li>
<li>e) The type of action taken by the employer or district magistrate.</li>
</ol>
<h2><b>Security:</b></h2>
<p>The Company realises how difficult it is for a victim to come forward with sexual harassment at workplace complaints and respects the victim’s desire to keep the matter private.</p>
<h2><b>COMPLAINANT / VICTIM PROTECTION:&nbsp;</b></h2>
<p>The Company is dedicated to ensuring that no employee who reports harassment at workplace is subjected to retaliation in any way. Any retaliation will result in disciplinary action. When dealing with sexual harassment accusations, the Company will guarantee that the victim or witnesses are not mistreated or discriminated against. Anyone who abuses the system (for example, by intentionally making an accusation knowing it is false) will face disciplinary action as outlined in the Act.</p>
<h2><b>CONCLUSION:</b></h2>
<p>Finally, the Company reaffirms its commitment to creating a harassment-free and discrimination-free workplace where each worker is regarded with decency and respect. Posh act or sexual harassment law&nbsp;<a href="https://en.wikipedia.org/wiki/Sexual_Harassment_of_Women_at_Workplace_(Prevention,_Prohibition_and_Redressal)_Act,_2013#:~:text=The%20Sexual%20Harassment%20of%20Women,Parliament)%20on%203%20September%202012.">ensures safety of females</a>&nbsp;at online and offline workplaces.&nbsp;</p>
</div>
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<p>The post <a rel="nofollow" href="https://muds.co.in/posh-act-all-about-the-sexual-harassmnet-law-in-inida/">POSH Act: ALL ABOUT THE SEXUAL HARASSMNET LAW IN INDIA</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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		<title>Do&#8217;s and Don&#8217;ts for Employers When Implementing ESOPs</title>
		<link>https://muds.co.in/stock-option-program/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Mon, 14 Feb 2022 05:01:47 +0000</pubDate>
				<category><![CDATA[Employee Stock Ownership Plan]]></category>
		<category><![CDATA[Employee Stock Option Plan]]></category>
		<category><![CDATA[ESOP]]></category>
		<category><![CDATA[ESOP POOL]]></category>
		<category><![CDATA[Stock Option Program]]></category>
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					<description><![CDATA[<p>Do’s and Don’ts for Employers When Implementing ESOPs Stock options, or ESOPs in general, are a very successful strategy for retaining critical personnel in the Company&#8217;s ecosystem. It not only benefits the employee in creating wealth for himself, but it also aids in matching the employee&#8217;s particular aspirations with the Company&#8217;s general aim. Having said [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/stock-option-program/">Do&#8217;s and Don&#8217;ts for Employers When Implementing ESOPs</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}</style>				<h2>Do’s and Don’ts for Employers When Implementing ESOPs</h2><p>Stock options, or ESOPs in general, are a very successful strategy for retaining critical personnel in the Company&#8217;s ecosystem. It not only benefits the employee in creating wealth for himself, but it also aids in matching the employee&#8217;s particular aspirations with the Company&#8217;s general aim. Having said that, it is critical to remember the do&#8217;s and don&#8217;ts while creating a Stock Option Program.</p><p>The Stock Option, like any coin, has two sides and might fail if the Company does not implement the programme carefully. The following are some dos and don&#8217;ts for the Company in terms of Stock Option Programs.</p><h2><b><i>Do’s for a Stock Option Program</i></b></h2><h5><b>1. Thought through Program:</b></h5><p>ESOPs are a long-term investment tool. It is a reward mechanism, and once implemented, it is difficult to remove or significantly alter. This necessitates rigorous planning prior to its implementation. Aspects such as objectives anticipated to be attained, long-term dilution appetite, and staff coverage extent must be considered.</p><h5><b>2. Understand the Industry Best Practices and Market Trends:</b></h5><p>Stock options have now become an essential component of pay, particularly at the executive level. Since the usage of ESOPs has grown in the last several decades, there is a wealth of data available on option structures, terms, and their influence on corporate objectives. It is critical to grasp the current techniques and experience in this area.</p><h5><b>3. Effective Employee Communication:</b></h5><p>The employee should fully comprehend the parameters of the alternatives offered to them. It is critical that they have a thorough grasp of the Scheme&#8217;s regulations as well as the conditions of their particular awards. While customers should have a feel of what wealth creation may happen for them if they connect with the Company&#8217;s purpose, they should also understand that not every year and not every Grant will be a money spinner — firms go through ups and downs in the natural course of business.</p><p>It is also critical to ensure that the Grant documentation is valid and appropriate. Appointment letters and side letters should avoid ambiguous phrasing.</p><p>Periodic communication of the Company&#8217;s financial and operational success is also a useful habit to follow in order to foster a sense of belonging. </p><h5><b>4. Revisit the program at regular intervals</b></h5><p>The Company should review the plans on a regular basis to verify that they are in accordance with the Management Objectives, applicable laws and rules, and industry practises. Typically, shareholder approvals allow for considerable leeway in tweaking the conditions to better match with business reality.</p><p><strong><i>Don’ts for a Stock Option Program</i></strong></p><h5><b>1.  Ad hoc practices</b></h5><p>An ad hoc stock option programme should never be implemented by the company. These programmes should ideally be tailored to the needs of the company and the goals it wishes to achieve. To design the correct programme, it is critical to understand the Company&#8217;s legal structure, business strategies, pay policy, and industry standards.</p><p>Ad hoc policy changes, such as introducing and removing personnel categories, abruptly modifying terms, and so on, should be avoided. </p><h5><b>2. Commitment to Employees without having a Scheme</b></h5><p>Employees should not be committed by the company before the Scheme is implemented. For example, the award amount for a specific employee will be determined by the instrument chosen (ESOPs / RSUs / SARs) as well as the expected wealth generation for that employee. Making a promise without establishing the framework and having a strategy in place may not provide the Company with the freedom that it should have given the limits.</p><p>The Management should not issue award letters until the Shareholders have approved the formation of the desired ESOP Pool and the implementation of the proposed Scheme. This action is null and invalid in the perspective of the law since it is void from the start. </p><h5><b> 3.  Committing wealth creation</b></h5><p>The benefits of options are totally dependent on the increase in the firm valuation. Aside from company success, value is also affected by a number of external factors. Companies, whether formally or informally, should avoid calculating and committing to value appreciation. Employees, on the other hand, should be made aware of the possibility of delayed and uncertain returns while the advantages are communicated.</p><h5><b>4.  Mention of ESOPs in Appointment letters or employment contracts</b></h5><p>ESOPs are entirely optional. They are not a salary or other kind of payment that can be quantified and agreed to. Companies are not required by law to provide employees with ESOPs year after year. Even awarded options may contain performance-linked vesting, which means that the benefit is not guaranteed even after grant. Making it a part of the appointment letter or employment contract sends the message that it is the employee&#8217;s entitlement to get ESOPs year after year. A remark of this nature should be avoided. It is a good practise to treat <a href="https://muds.co.in/esop/">ESOP</a> agreements as distinct <a href="https://en.wikipedia.org/wiki/Employee_stock_option">legal contracts</a>.</p>						</div>
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		<p>The post <a rel="nofollow" href="https://muds.co.in/stock-option-program/">Do&#8217;s and Don&#8217;ts for Employers When Implementing ESOPs</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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		<title>A Success Story: How 35 Indian Start-ups Entered 100 Cr ESOP POOL</title>
		<link>https://muds.co.in/35-indian-start-ups-entered-100-cr-esop-pool/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Sat, 08 Jan 2022 05:09:46 +0000</pubDate>
				<category><![CDATA[Employee Stock Ownership Plan]]></category>
		<category><![CDATA[35indian startup]]></category>
		<category><![CDATA[Employee Stock Option Plan]]></category>
		<category><![CDATA[ESOP]]></category>
		<category><![CDATA[ESOP POOL]]></category>
		<guid isPermaLink="false">https://muds.co.in/a-success-story-how-35-indian-start-ups-entered-100-cr-esop-pool/</guid>

					<description><![CDATA[<p>How 35 Indian Start-ups Entered 100 Cr ESOP POOL The year 2021 has turned out to be a magical year as more than 35 Indian start-ups have entered 100 Crore Employee Stock Option Plan ESOP POOL. In this article we have discussed their journey and how you can become one of those in future. ESOP [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/35-indian-start-ups-entered-100-cr-esop-pool/">A Success Story: How 35 Indian Start-ups Entered 100 Cr ESOP POOL</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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							<h2>How 35 Indian Start-ups Entered 100 Cr ESOP POOL</h2><p>The year 2021 has turned out to be a magical year as more than 35 Indian start-ups have entered 100 Crore Employee Stock Option Plan ESOP POOL. In this article we have discussed their journey and how you can become one of those in future. ESOP or employee stock ownership plan is the secret of their success.</p><p>When an unprecedented $36 billion was invested in Indian startups in 2021, 35 non-founder senior management members had entered the Rs 100-crore stock options club, offering the opportunity for wealth accumulation that employee stock options enable.</p><p>According to top-tier entrepreneurs, the growing membership also implies that Esops have entered the mainstream in India and are more likely to become a much greater component of employees&#8217; compensation packages sooner or later.</p><p>Employee Stock Option Plans (ESOPs) have recently gained prominence as a result of recent IPOs and investment booms in young enterprises. This has not only changed the dynamics of the Indian economy, but it has also resulted in affluent non-founder employees receiving large stock option payouts.</p><h3><b>A Rs 100-crore stocks options club is now open to 35 non-founders.</b></h3><p>Recently launched <b>esop for private companies</b>  and privately held IT businesses in India have pushed 35 non-founder executives into the Rs 100 crore club of stock options, making them an elite group inside India&#8217;s fast growing digital economy. That is consistent with material supplied to ET by Longhouse Consulting, a government search and advisory business.</p><p><b>Esop for private companies:</b> Giant Indian start-ups like Nykaa, Zomato, PolicyBazaar, and Paytm, as well as Flipkart Group, Byju&#8217;s, and Ola have entered into the 100Cr Crore. Longhouses predicts that the Rs 100 crore inventory options membership would have 100 members by the end of the year.</p><p><b>Stock options are becoming increasingly popular: </b>The growing Rs 100-crore membership illustrates two things: that Esops may lead to genuine wealth creation, and that 2021 was the year they went mainstream in India&#8217;s startup environment.</p><p>Several companies, particularly in the previous 12-18 months, have executed important inventory potential buybacks. We disclosed last month that about 40 companies, including PhonePe, Razorpay, Udaan, Flipkart, UpGrad, Swiggy, and Spinny, had acquired back employee shares worth Rs 3,200 crore.</p><p><b><i>&#8220;Employees embrace the potential to create money as long as buyouts are real. Contrary to popular notion, if a company provides Esop buybacks rapidly, employees will promote and go, they will stay completely longer and will not sell their options soon.&#8221;</i></b></p><p><b><i>-told Harshil Mathur, cofounder and CEO of Razorpay, India</i></b></p><p>&#8220;Workers are beginning to understand that wage increases are insufficient to enable them to make significant changes in their lifestyles or achieve financial independence&#8221; he said, adding that such commitments should be formalised in writing, as should the terms under which shares may be granted during buybacks. Mathur emphasised the importance of Esops.</p><h3><b>Flipkart generated India&#8217;s largest Esop pool, valued at Rs 17,000 crore.</b></h3><p>Flipkart was one of the biggest profit generated (by employee stock ownership plan) company of India, it has created an esop pool of Rs 17,000 crore, propelling it to the top of the list of Indian online companies that have awarded stock options to its employees. It is utilised by Oyo, Zomato, Paytm, and Nykaa, according to information received by ET from government search agency Longhouse Consulting.</p><p><b>Twelve months of verification &amp; Documentation Process: Esops in Indian startups have enjoyed a banner year, with more companies implementing buyback programmes and benefiting their employees.</b></p><ul><li>Flipkart&#8217;s Rs 600-crore buyback was one of the year&#8217;s largest.</li><li>Meanwhile, after debuting in Indian marketplaces earlier this year, Zomato and Nykaa made a fortune for both consumers and staff. We recently disclosed that Zomato&#8217;s stock market debut resulted in the creation of 18 millionaires.</li><li>ShareChat, a regional language social media network that became a unicorn in April, amassed an Esop pool of Rs 462 crore.</li></ul><h3><b>Employee stock ownership plan</b><b> Path and Momentum Have Shifted</b></h3><p>Employees have difficulties when it comes to Esops, regardless of the potential for financial gain. According to consultants, when exercising options, they include taxation points, rare liquidity programmes, and long-drawn vesting schedules.</p><p>According to Pallavi Nautiyal, regional head of Qapita, an equity administration platform, vesting durations are typically out of sync with the rate of business development, as organisations have gotten unicorns in months.</p><p>Thus according to Nautiyal, two major issues that workers face are repeat taxation (in the form of perquisite tax while exercising options) and capital advantageous assets tax upon liquidation. &#8220;When employees exercise their shares, they should instantly pay taxes on the notional beneficial assets,&#8221; said Abhishek Goyal, co-founder of the information portal Tracxn.</p><p>As a result of the large inflow of financing into these start-ups, the emphasis on employee stock option programmes has shifted. They are known for fostering a growth-oriented workplace and are excited about issuing ESOPs to its employees, which they have used as a tactic to recruit fresh talent on multiple occasions.</p><p>Esops for personal use Employee buybacks may also be undertaken by companies, resulting in a windfall for their employees. It allows employees to focus on their investments while knowing that the company is concerned not just with its own success but also with ensuring that the employee improves with them. It establishes a pool of wealth development for its employees, contributing to the company&#8217;s success while accumulating retirement savings that vastly outweigh the retirement plan options that the employee would otherwise have to implement. Razorpay, for example, repurchases at least once every year. Buybacks have also just begun at Udaan, UpGrad, Swiggy, and the Flipkart Group.</p><p>A wage boost isn&#8217;t the only thing an employee looks for in a promotion. A desired lifestyle needs innovative compensation arrangements, and ESOPs have gained in favour in recent years as a result. People no longer see a single source of income as a method of creating wealth. Their income and holdings must be diverse, as must their investing techniques. The possessions of these 35 people, according to the Longhouse Consulting company, speak to that, and we couldn&#8217;t agree more.</p><h2><a href="https://muds.co.in/esop/"><b>Employee Stock Option Plan</b></a></h2><p>Businesses commonly utilise employee stock option programmes to compensate, retain, and attract employees. Employee stock option programmes aren&#8217;t meant to be retirement plans. Employee stock option plans, on the other hand, are contracts between a corporation and its employees that provide employees the right to acquire a specific number of the company&#8217;s shares at a set price over a set period of time. The grant or exercise price is another name for the fixed price. Employees who have been granted stock options anticipate earning money by exercising their options to acquire shares at the exercise price while the shares are trading at that price.</p><h4><b>Procedure for Issue of Employee Stock Option Plan</b></h4><p>Employee Stock Option Plans (ESOPs) are a type of employee benefit plan. It is given to employees by the firm in order to foster employee ownership in the company. Employees are given cheap stock options in the company. An ESOP can be issued by any corporation. Other than listed firms, all companies must issue it in compliance with the terms of the Companies Act of 2013 and the Companies (Share Capital and Debentures) Rules of 2014. In the case of publicly traded firms, they shall issue in conformity with the Employee Stock Option Scheme Guidelines of the Securities and Exchange Board of India.</p><p>Employee stock options are defined in Section 2(37) of the Companies Act, 2013 as the option granted to directors, employees, or officers of the company or its holding or subsidiary company to acquire, benefit, or subscribe for the firm&#8217;s shares at a preset price on a future date. Thus, an ESOP is a strategy in which a business offers to enhance its subscribed share capital by issuing additional shares at a fixed rate to its employees.</p><p>The ESOP helps both the corporation and its employees. It promotes startups by allowing employees to be rewarded once the firm goes public. If the qualifications are met, every employee of the firm can be issued an ESOP.</p><h3><b>Who can avail the ESOPs</b></h3><p><img fetchpriority="high" decoding="async" class="wp-image-7722 aligncenter" src="https://muds.co.in/wp-content/uploads/2022/01/Who-can-avail-the-ESOPs.png" alt="Who can avail the ESOPs" width="418" height="209" /></p><p>According to Rule 12(1) of the Companies (Share Capital and Debentures) Rules, 2014, ESOPs can be granted to the following employees:</p><ul><li>A company&#8217;s permanent employee who works in or outside of India.</li><li>A company director, includes a full-time or part-time director but not an independent director.</li><li>A permanent employee or director of a subsidiary company, holding company, or associate firm in India or beyond India.</li></ul><p><b><i>A corporation cannot provide an ESOP to any of the following employees: </i></b></p><ul><li>an employee who is a member of the promoter group or a promoter of the company.</li><li>A director who, directly or indirectly, owns more than 10% of the company&#8217;s outstanding equity shares, either personally or through a corporation or a family.</li></ul><p>The above two restrictions, however, do not apply to Startup Companies for a period of 10 years from the date of establishment.</p><p><b>Let’s understand the ESOP Issuance Process</b></p><p>The approach for issuing ESOPs under the Rules is identical to the procedure for listed businesses under the Securities and Exchange Board of India Employee Stock Option Scheme Guidelines. A company&#8217;s procedures for granting ESOPs are as follows:</p><ul><li>Prepare an ESOP draft in compliance with the Companies Act of 2013 and the Rules.</li><li>Prepare the notice for the board meeting, as well as the draught resolution to be voted on during the meeting.</li><li>Send the board meeting notification to all directors at least seven days before the meeting.</li><li>Pass a resolution authorising the issuance of shares by ESOP, decide the price of shares to be issued via ESOP, and set a time and date for the general meeting to pass a special resolution authorising the issuance of ESOP.</li><li>Send the proposal to the board meeting to all directors within fifteen days after the meeting&#8217;s completion, and file the MGT-14 form with the Registrar of Companies within fifteen days of the board resolution being passed.</li><li>Send notice of the general meeting to all of the company&#8217;s directors, auditors, shareholders, and secretarial auditors at least twenty-one days before the meeting date.</li><li>In the general meeting, pass a special resolution authorising the issuing of shares under the ESOP to the company&#8217;s workers, directors, and officers.</li><li>File the MGT-14 form, along with the papers, with the Registrar of Companies within thirty days after the special resolution being passed in the general meeting.</li><li>Send options to the company&#8217;s workers, directors, and executives to purchase shares through an ESOP.</li><li>Maintain a &#8216;Register of Employee Stock Options&#8217; in Form No.SH-6 and record the details of the ESOP awarded to the company&#8217;s workers, directors, or officers.</li><li>If an <b>esop</b><b> for private companies</b>  wishes to issue an ESOP, it must guarantee that the Articles of Association (AoA) allow for the issuing of shares through an ESOP. If the AoA does not authorise, the firm shall first convene an extraordinary general meeting to amend the AoA to incorporate the provisions for issuance of shares via ESOP, and then hold a board meeting to adopt the resolution and obtain shareholder approval for the ESOP Scheme.</li></ul><p><b>ESOP allocation Process</b></p><p><i>There are three terms that are primarily concerned with the time of issuance of shares to employees via ESOP. These are their names:</i></p><ul><li><b>Grant: </b>The term &#8220;grant&#8221; refers to the distribution of shares to employees. It entails telling the employee that he is a candidate for an ESOP. While giving employees the option of an ESOP, the corporation will have the discretion to decide the exercise price.</li><li><b>Vest:</b> The right of employees to apply for the shares that have been issued to them. For the ESOP plan, there must be a minimum of one year between the issuance of option and the vesting of option.</li><li>The corporation will be allowed to choose the lock-in period for the shares issued (if any) once the option is exercised. Workers will be unable to receive dividends, invest, or reaping the perks of a shareholder in regard to the ESOP granted to him after the shares are issued upon implementation of his option.</li></ul><p><b>Disclosures Required When Issuing an ESOP</b></p><ul><li>The following disclosures should be included by the corporation in the explanatory statement attached to the notice for approving the special resolution for the issue of ESOP-</li><li>The total amount of stock options that will be issued,</li><li>The workers who have been recognised as being eligible to participate in the ESOP.</li><li>ESOP vesting period requirements,</li><li>The maximum amount of time that options can be vested,</li><li>The cost of exercise and the process of exercise,</li><li>If there is a lock-in period,</li><li>The provision of the greatest amount of alternatives to an employee,</li><li>The methodology through which the corporation values its options,</li><li>The criteria for the expiration of employee options,</li><li>A declaration that the firm will follow the appropriate accounting rules.</li></ul>						</div>
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		<p>The post <a rel="nofollow" href="https://muds.co.in/35-indian-start-ups-entered-100-cr-esop-pool/">A Success Story: How 35 Indian Start-ups Entered 100 Cr ESOP POOL</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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		<title>Managing ESOPs after rollout</title>
		<link>https://muds.co.in/managing-esops-after-rollout/</link>
		
		<dc:creator><![CDATA[Shweta Gupta]]></dc:creator>
		<pubDate>Wed, 20 Oct 2021 05:11:17 +0000</pubDate>
				<category><![CDATA[Employee Stock Ownership Plan]]></category>
		<category><![CDATA[ESOP]]></category>
		<guid isPermaLink="false">https://muds.co.in/managing-esops-after-rollout/</guid>

					<description><![CDATA[<p>Managing ESOPs after rollout Employee stock ownership plans (ESOPs) are used to motivate employees and give them a sense of &#8220;ownership.&#8221; The process does not finish with the distribution of Grant letters to workers; rather, it begins there. Furthermore, because ESOPs are a long-term investment, it is critical to engage, support, and keep Option holders [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/managing-esops-after-rollout/">Managing ESOPs after rollout</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></description>
										<content:encoded><![CDATA[<h1>Managing ESOPs after rollout</h1>
<p>Employee stock ownership plans (ESOPs) are used to motivate employees and give them a sense of &#8220;ownership.&#8221; The process does not finish with the distribution of Grant letters to workers; rather, it begins there. Furthermore, because ESOPs are a long-term investment, it is critical to engage, support, and keep Option holders informed about the Plan and its success.</p>
<p>In this blog, we are going to talk about what are <a href="https://muds.co.in/esop/">ESOPs</a>, <a href="https://muds.co.in/esop/">ESOP meaning</a> and Employee Stock Option scheme and how does it work</p>
<h2><b>Meaning of ESOPs</b></h2>
<p>An employee stock ownership plan (ESOP) is a type of employee benefit plan that offers employees a share of the company&#8217;s ownership. ESOPs provide different tax benefits to the sponsoring firm, the selling shareholder, and the participants, making them eligible schemes. Employee stock ownership plans (ESOPs) are frequently used as a corporate finance approach to matching the interests of employees and shareholders.</p>
<p>It&#8217;s one thing to roll out ESOPs; it&#8217;s another to make sure they&#8217;re a success. So, let&#8217;s take a look at the major aspects to consider when managing <a href="https://muds.co.in/esop/">ESOP services</a> once they&#8217;ve been implemented: communication, documentation, administration, and compliance<b></b></p>
<h3><b>1. Employee communication and awareness</b></h3>
<p>Any employee benefit plan&#8217;s effectiveness hinges on effective communication. Employees will grasp the relationship between their performance and the company&#8217;s success if the Plan is effectively disseminated through a structured communication channel.</p>
<p>Employees&#8217; intended participation in converting these options to business shares, therefore establishing ownership, is ensured through constant and phased-out communication with them during the Plan term and its specifics on vesting of Options, expiry/lapse at regular intervals.</p>
<p>Periodical financial performance, information on the valuation of shares, and sharing ideas through Townhalls are typical methods of communication. Banners, FAQ booklets, a helpdesk, and other methods are used to raise awareness.<b></b></p>
<p><strong>Read Also: <a href="https://muds.co.in/esops-benefits-for-employees/">ESOP Benefits for Employees</a></strong></p>
<h3><b>2. Effective tool and system for plan execution&nbsp;</b></h3>
<p>As we all know, <a href="https://muds.co.in/esop/">Employee Stock Option Plans</a> last for a long time, and the data upkeep that they require can be time-consuming, putting a strain on the company&#8217;s administrative resources. Because Plan information is updated in real-time based on actions described in the plan, handling this information in real-time necessitates the use of highly competent and up-to-date tools and systems. The firm and the grantees benefit from a customized design that makes management and administration easier. For efficient Plan Management throughout time, a solution that efficiently generates Management reports and dashboards while also ensuring compliance is required.</p>
<p>Automation of superior staff handholding procedures and paper reduction reduces administrative burden and human reliance, resulting in compliant data integrity, improved user experience, and data security.<br />
<b></b></p>
<h3><b>3. Data Security and Access</b></h3>
<p>Every strategy includes two sides of stakeholders: one for the firm and one for the grantees. From a data management standpoint, the information flow strategy should contain issues of confidentiality, which is an important part of any <a href="https://muds.co.in/esop/">ESOP plan</a>. Secure logins and structured reporting enable needed stakeholders to have access to only the information they need. Companies should use tools and systems that follow industry best practices to guarantee the safety and security of private data held by the firm and its workers.</p>
<ul>
<li>Data security measures, as well as process and IT security</li>
<li>System/tool continuity and disaster recovery for ESOP information.</li>
<li>Continuous vulnerability and security testing, as well as audits by certified auditing firms</li>
</ul>
<h3><b>4. Management Information Systems (MIS) and Reporting</b></h3>
<p>Management reports and dashboards that are well-defined and organized aid in improved decision-making, control, and plant performance evaluation.</p>
<p>The aforementioned criteria are just a few (and far from exhaustive) guidelines for properly managing your <a href="https://muds.co.in/esop/">ESOP</a> Plans and ensuring a successful <a href="https://muds.co.in/esop/">Employee stock option plan scheme</a> for your firm and employees.</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/managing-esops-after-rollout/">Managing ESOPs after rollout</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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		<title>How Annual ESOP Share Price is Determined</title>
		<link>https://muds.co.in/annual-esop-share-price-determined/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Fri, 31 May 2019 19:30:22 +0000</pubDate>
				<category><![CDATA[Employee Stock Ownership Plan]]></category>
		<category><![CDATA[ESOP]]></category>
		<guid isPermaLink="false">https://muds.co.in/how-annual-esop-share-price-is-determined/</guid>

					<description><![CDATA[<p>How Annual ESOP Share Price is Determined ESOP &#38; Its Purpose ESOP or Employee Stock Ownership Plan is a magnificent incentivizing tool in the hands of companies and start-ups. Through this, a company offers shares of the company to deserving employees holding key managerial positions, on a predetermined date and price. As the name suggests, [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/annual-esop-share-price-determined/">How Annual ESOP Share Price is Determined</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></description>
										<content:encoded><![CDATA[<h1>How Annual ESOP Share Price is Determined</h1>
<h2>ESOP &amp; Its Purpose</h2>
<p>ESOP or <a href="https://muds.co.in/esop/">Employee Stock Ownership Plan</a> is a magnificent incentivizing tool in the hands of companies and start-ups. Through this, a company offers shares of the company to deserving employees holding key managerial positions, on a predetermined date and price.</p>
<p>As the name suggests, ESOP is call option and hence, it is not binding on the employee to buy the shares. But it is almost always willingly lapped up by the employees as apart from substantial economic benefit, it also grants security, sense of belonging, and feeling of ownership.</p>
<p>In return, the companies are able to retain competent professionals long-term, and also attract new talent. The employees who are bestowed with ESOPs stay greatly motivated and work full heartedly towards the growth of the company.</p>
<h2>How Are Shares of ESOP Valued Annually?</h2>
<p>When it comes to the valuation of shares of a public ltd. company, it is quite simple, as it is registered with the public stock exchange, and is traded every day. The real issue is with private companies and start-ups, that are not listed and these are the ones which award their employees with ESOPs most of the time.</p>
<p>Getting to value unlisted stocks is a little complex as they are not registered with any stock exchange. The regulations demand that an <a href="https://muds.co.in/esop/">ESOP</a> shall value its shares annually to determine the Fair Market Value (FMV). FMV is the price a share would command if traded in the open market, i.e., the price acceptable to a willing buyer and a willing seller.</p>
<p>In order to determine a genuine annual price of ESOP, the company hires a third-party independent valuation firm which will judiciously follow the mechanism to work it out.</p>
<h2>Steps Followed to Find out Annual Value of the Shares:</h2>
<p><strong>Step 1:</strong> The valuator gathers information about all the aspects of the company including its historical and prospective financial figures.</p>
<p><strong>Step 2:</strong> Next, the valuator holds meetings with the management and discusses the past performance as well as future expectations. This helps him get an insight into the decision making and approach of the company.</p>
<p><strong>Step 3:</strong> Thereafter, the valuator gets to serious working out, making calculations based on the gathered information. Side by side, he writes a detailed report giving out a step-by-step description of how he reached the conclusive value. The report has an in-depth description of the working of calculations for transparency and once completed, it is sent to the company.</p>
<p><strong>Step 4:</strong> Finally, a meeting between the management and valuator takes place to satisfy any doubts or queries about the value decided.</p>
<h2>Methods Used for Value Determination</h2>
<p>The valuation firm can use any or all of the three approaches to find out the fair value of the ESOP shares:</p>
<ul>
<li>Income approach</li>
<li>Market approach</li>
<li>Asset approach</li>
</ul>
<p>It is quite common that a valuator uses at least two approaches to determine the value of the share and then compare and contrast the results to come to a final conclusion.</p>
<p>The income approach is most commonly used by the valuators in determining ESOP share value, followed by Market approach. The least used method for this purpose is Asset approach.</p>
<p>The entire process is a bit complicated but professional valuation firms are competent to do it!</p>
<h3>Substitute of ESOPs</h3>
<p>Compliances that varied regulatory bodies demand for ESOPs are quite a few and in addition, the taxation norms are also cumbersome. Paperwork and accounting work is extensive for ESOPs and these are the reasons because of which companies are adopting ‘<a href="https://muds.co.in/phantom-stock-option-touted-effective-way-incentivize-employees/">Phantom Stocks</a>’. It demands no physical transfer of shares, as well as no compliances, are required, giving lots of flexibility to the companies.</p>
<blockquote><p><em>&#8220;Phantom Shares have trumped over ESOPs due to their flexibility &amp; ease of handling; with no actual shares exchanging hands, the management prefer it!&#8221;</em><br />
<em>&#8211;<a href="https://in.linkedin.com/in/shweta-gupta-466b9736">Shweta Gupta</a>, Founder and CEO, <a href="https://muds.co.in/">MUDS</a></em></p></blockquote>
<p>The post <a rel="nofollow" href="https://muds.co.in/annual-esop-share-price-determined/">How Annual ESOP Share Price is Determined</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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		<title>How ESOPs Are Taxed: All You Want To Know In 3 Brief Points!</title>
		<link>https://muds.co.in/esops-taxed-want-know-3-brief-points/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Tue, 28 May 2019 03:30:21 +0000</pubDate>
				<category><![CDATA[Employee Stock Ownership Plan]]></category>
		<category><![CDATA[ESOP]]></category>
		<guid isPermaLink="false">https://muds.co.in/how-esops-are-taxed-all-you-want-to-know-in-3-brief-points/</guid>

					<description><![CDATA[<p>How ESOPs Are Taxed: All You Want To Know In 3 Brief Points! Companies understand that quality human resource is of paramount importance when it comes to fulfilling their ambitions. An apparent factor which is of utmost eminence for any company is retaining employees, who are crucial to the well-being of the company, but at [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/esops-taxed-want-know-3-brief-points/">How ESOPs Are Taxed: All You Want To Know In 3 Brief Points!</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></description>
										<content:encoded><![CDATA[<h1>How ESOPs Are Taxed: All You Want To Know In 3 Brief Points!</h1>
<p>Companies understand that quality human resource is of paramount importance when it comes to fulfilling their ambitions. An apparent factor which is of utmost eminence for any company is retaining employees, who are crucial to the well-being of the company, but at the same time, they are hard-pressed to hire more talents, in order to propel growth.</p>
<p>To attain this, companies take cognizance of the innovative means and ways by which they can incentivize employees. Salaries are spiced up by lucrative perks in order to retain and furthermore, motivate the workforce.</p>
<p>In modern times, there are innumerable strategies and schemes promoted by companies to enhance the economic package of deserving employees. Benefits like bonuses, life insurance, health insurance, pension, gratuity, ESOPs, paid vacations, free meals, etc. are a few add-ons that lure talent or help retain them.</p>
<h2>1. ESOP: A Marvelous Way To Incentivize Employees!</h2>
<p>ESOP is an abbreviation of Employee Stock Ownership Plan and it is granted to employees who get the shares of the company that they are employed in, at a discounted rate or even free!</p>
<p><a href="https://muds.co.in/esop/">ESOPs</a> ensure loyalty, bring about long-term commitment, trigger a perception of ownership, a sense of belonging and above all, a strong motivation to work at optimum for the growth and advancement of the company.</p>
<h2>2. Are Benefits Derived From ESOPs Taxable?</h2>
<p>Yes, ESOPs are covered by the Income Tax Act, 1961, and means of taxation is enumerated in Sections 17 (2) (vi) and 49 (2AA).</p>
<p>The purchase, as well as the sale of <a href="https://www.muds.co.in/taxability-of-esop/">ESOPs, are taxable</a>, therefore, it can be stated that an employee has to pay tax at two stages.</p>
<h2>3. How Are ESOPs Taxed?</h2>
<h3>Stage 1.</h3>
<p>ESOPs attract tax in the first stance when the employee exercises his option, that is, buys the stock. The Exercise Price naturally is much below their Fair Market Value (FMV) and thus, the difference between the two is treated as a prerequisite in the hands of the employee, and the employer is bound to deduct tax at source.</p>
<p>The determination of FMV is done differently for listed and unlisted shares. In the case of a listed share, the FMV is calculated by averaging the opening and closing price on that particular date.</p>
<p>On the other hand, if the share is unlisted, then, the FMV is finalized by a registered Merchant Banker, on the specific date.</p>
<h3>Stage 2.</h3>
<p>ESOPs attract tax a second time when the allotted shares are sold off. The profit derived by the sale is treated as gains and is taxed as short-term or long-term capital gains, depending on the length of the period it is held.</p>
<p>Once again, there are two different mechanisms of taxation depending on whether the stock is listed or unlisted.</p>
<p>For a listed share, the law maintains that a holding period of more than 12 months will deem it to be long-term capital gains and shall be charged at 10% without indexation benefit. On the contrary, less than 12 months of holding will render it as short-term capital gains and will be taxable at 15%.</p>
<p>In the case of unlisted shares, the holding period doubles up, and therefore, holding the shares for more than 24 months will be considered long-term capital gains. In such cases, the tax shall be levied at 20% with indexation benefit and 10% without indexation benefit. If held for less than 24 months, it shall be treated as short-term capital gains and will be taxable as per the slab rate of the employee.</p>
<h2>Final Word!</h2>
<p>Though ESOPs are a popular tool of incentivizing, they attract lots of compliances by different regulators, leading to a lot of paperwork and more importantly, are taxed twice! To save themselves from such cumbersome procedures, the companies have started awarding <a href="https://www.muds.co.in/which-is-better-esop-or-phantom-stock/">Phantom stocks</a>, which come with complete flexibility and fewer compliances.</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/esops-taxed-want-know-3-brief-points/">How ESOPs Are Taxed: All You Want To Know In 3 Brief Points!</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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		<title>Employee Stock Option Plan (ESOP) Taxation In India</title>
		<link>https://muds.co.in/employee-stock-option-plan-esop-taxation-india/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Thu, 16 May 2019 04:30:04 +0000</pubDate>
				<category><![CDATA[Employee Stock Ownership Plan]]></category>
		<category><![CDATA[ESOP]]></category>
		<guid isPermaLink="false">https://muds.co.in/employee-stock-option-plan-esop-taxation-in-india/</guid>

					<description><![CDATA[<p>Employee Stock Option Plan (ESOP) Taxation In India What is ESOP? ESOP is an abbreviation of Employee Stock Ownership Plan and an extensive employee benefit that is awarded to upper-level executives by companies and start-ups. The employees are offered shares of the company they are working in, for free or at a discounted price, at [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/employee-stock-option-plan-esop-taxation-india/">Employee Stock Option Plan (ESOP) Taxation In India</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
]]></description>
										<content:encoded><![CDATA[<h1>Employee Stock Option Plan (ESOP) Taxation In India</h1>
<h2>What is ESOP?</h2>
<p>ESOP is an abbreviation of Employee Stock Ownership Plan and an extensive employee benefit that is awarded to upper-level executives by companies and start-ups. The employees are offered shares of the company they are working in, for free or at a discounted price, at a predetermined price.</p>
<h2>Why are ESOPs Given?</h2>
<p>It is majorly a motivational and retention tool for employees who hold key managerial posts, giving them an economic benefit to staying vested in the company.</p>
<p>The rationale behind awarding ESOP is to attract new talent, retain old ones; provides a reason to stay long-term, promotes loyalty, and motivates to walk that extra mile!</p>
<h2>What Benefits It carries?</h2>
<p>From the employees’ point of view there are numerous benefits:</p>
<ul>
<li>Brings about the financial well being</li>
<li>Works as retirement savings</li>
<li>Gives immense job satisfaction along with security</li>
<li>Provides social security</li>
<li>Enhances trust in the firm and its management</li>
<li>Improves overall well being</li>
</ul>
<h2>What Compliances are Mandatory For ESOP?</h2>
<p>There are lot many legal and corporate compliances attached to ESOPs that have to adhere. Be it Companies Act, 2013, or Income Tax Act, or SEBI or FEMA, there is some compliance to be kept in mind.</p>
<h2>How is ESOP Taxed?</h2>
<p>There is two-tier taxation on <a href="https://muds.co.in/esop/">ESOPs</a> as mandated by the Income Tax Act, 1961, and enumerated in Sections 17 (2) (vi) and 49 (2AA).</p>
<h2>First Stage of Taxation:</h2>
<p>The first instance of tax is set off when the employee exercises his option and the shares are allotted to him. The Fair Value Price (FVP) of the shares and the exercise value are taken together and the difference that comes out is added to the salary of the employee and treated as taxable. The company is liable to deduct tax after computing the benefit to the salary slab.</p>
<p>The FVP is determined to depend on the fact that whether the shares are of a listed company in India or not. If it belongs to a listed company, then, the FMV is determined by taking out the average of the opening price and the closing price on that particular date. In case, the stock is not listed in India, then the FVP is calculated and determined by a merchant banker on a specific date, and who is registered with the Securities and Exchange Board of India.</p>
<p>So, in a way, we can conclusively say that ESOPs bring around monetary gains even when they are purchased!</p>
<h2>Second Stage of Taxation For Listed Shares:</h2>
<p>The second time ESOP attracts taxation when the allotted shares are sold off by the employee. In this scenario, the profit coming out of it is taxed as capital gains depending on whether it falls in the category of long-term or short-term capital gains.</p>
<p>If the shares belong to a listed company, then holding them for a period less than 12 months, shall attract short-term capital gains and will be taxable at the rate of 15%. On the other hand, if the shares are held for more than 12 months then, they will be deemed as long-term capital gains. Furthermore, if the amount is less than one lakh, then no tax shall be levied. In case the amount is more than one lakh then the tax shall be levied at 10% without indexation benefit.</p>
<h2>Second Stage of Taxation For Unlisted Shares:</h2>
<p>In case the share is of an unlisted company, it shall be considered long-term capital gains when held for more than 24 months, and deemed to be short-term capital gains if held for less than that.</p>
<blockquote><p><em>&#8220;<a href="https://muds.co.in/know-phantom-stock-can-trump-real-stock/">Phantom Stocks</a> can trump over real stock as Phantom stocks have lots of flexibility &amp; are not tied up in compliances &amp; taxations like Employee Stock Ownership Plans.&#8221;</em><br />
<em>&#8211; <a href="https://in.linkedin.com/in/shweta-gupta-466b9736">Shweta Gupta</a>, Founder, and CEO, <a href="https://muds.co.in">MUDS</a></em></p></blockquote>
<p>The post <a rel="nofollow" href="https://muds.co.in/employee-stock-option-plan-esop-taxation-india/">Employee Stock Option Plan (ESOP) Taxation In India</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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		<title>Why Phantom Stock Can Be Better Than Real Stock?</title>
		<link>https://muds.co.in/phantom-stock-can-better-real-stock/</link>
		
		<dc:creator><![CDATA[m0dsAdmn]]></dc:creator>
		<pubDate>Sat, 20 Apr 2019 07:38:52 +0000</pubDate>
				<category><![CDATA[Phantom Stocks]]></category>
		<category><![CDATA[ESOP]]></category>
		<category><![CDATA[Phantom Stock]]></category>
		<guid isPermaLink="false">https://muds.co.in/why-phantom-stock-can-be-better-than-real-stock/</guid>

					<description><![CDATA[<p>Why Phantom Stock Can Be Better Than Real Stock? Incentivizing Key Management Members is of Paramount Importance First of all, let’s analyze why incentivizing of key management workers, through ESOP, is crucial for all companies! Employee Stock Ownership Plan (ESOP) is highly significant in today’s high-tech economy, as cut-throat competition makes it mandatory for companies [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://muds.co.in/phantom-stock-can-better-real-stock/">Why Phantom Stock Can Be Better Than Real Stock?</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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										<content:encoded><![CDATA[<h1>Why Phantom Stock Can Be Better Than Real Stock?</h1>
<h2>Incentivizing Key Management Members is of Paramount Importance</h2>
<p>First of all, let’s analyze why incentivizing of key management workers, through ESOP, is crucial for all companies!</p>
<p>Employee Stock Ownership Plan (ESOP) is highly significant in today’s high-tech economy, as cut-throat competition makes it mandatory for companies to provide incentives to retain employees plus keep them motivated to stimulate growth.</p>
<p>It’s not only consequential in retaining them on the payroll but at the same time giving them a strong push to make the company advance, owing to the fact that with the growth of the company, their stocks will reap rich benefits.</p>
<h2>Phantom Stocks- Comprehending Its Meaning</h2>
<p>Of all the varied options of <a href="https://www.muds.co.in/esop/">ESOPs</a> like Employee Stock Option Scheme, Compensation Plan, Employee Stock Purchase Plan, Incentive Plans, etc. the one which has gained the most ground in recent years, is Phantom Stock, also known as Shadow Stock.</p>
<p>It has been so named because of its unique characteristic; it is hypothetical in nature yet, it enjoys the same value as real stocks. Their value goes up and down with the fluctuating shares, similar to real shares.</p>
<h2>Know How &amp; Why Phantom Stock Can Trump Over Real Stock</h2>
<p><em><strong>A two-fold benefit is a real reason for its expanding popularity!</strong></em></p>
<h3>Advantages For The Company</h3>
<ul>
<li>As there is no physical transfer of shares, thus, it means there is less paperwork, formalities involved and also, there is no dilution of shares.</li>
<li>It renders and ensures great flexibility as the company is free to structure the stock agreement as per its convenience and suitability.</li>
<li>Neither SEBI’s Employee Benefits Regulations nor the Companies Act, 2013, has any mention of Phantom Stock, thus reducing paper works and legal tangles.</li>
<li>The employees do not possess any rights that otherwise a shareholder may possess; this means holders of Phantom Stocks are not entitled to crucial voting rights, thus, no threat to the company.</li>
<li>It’s a win-win situation all the way as due to the motivational factor of monetary gain the employees put in all their efforts towards progress and value creation of the company.</li>
<li>It ushers in the complete dedication and loyalty of the employees who feel recognized and awarded for their hard work.</li>
</ul>
<h3>Benefits For The Employees</h3>
<ul>
<li>The convenience attached to Phantom Stock is immense; they are contractual agreements and need minimal documentation.</li>
<li>A legal entanglement is less as there are no regulations that bind it.</li>
<li>The monetary gain at the time of maturity is substantial for the employee.</li>
<li>The yearly tax burden is not there with Phantom Stock, as the tax needs to be paid only during maturity.</li>
<li>It gives a sense of belonging, a satisfaction of getting a share in the profit and an undeniable penchant to perform to the optimum.</li>
</ul>
<h2><strong>Conclusion: Based On Scrutiny of Facts</strong></h2>
<p>The ease of issuing them and the fulfillment of the purpose of reward and compensation has resulted in <a href="https://www.muds.co.in/know-phantom-stock-can-trump-real-stock/">Phantom Stocks</a> gaining ground over all other ESOPS.</p>
<p>It consequently helps to keep competitors at bay too, as satisfied employees won’t be swayed by them so easily.</p>
<p>Strong and capable leadership is the foundation pillar of progress and this is what <a href="https://muds.co.in/know-phantom-stock-can-trump-real-stock/">Phantom Stocks</a> ensure through its lure.</p>
<p>It takes care of the needs of all the parties involved- the owners, the shareholders, and, most importantly, the valuable employees.</p>
<p>No rigid rules &amp; regulations bind Phantom Stock, but it also means that the onus of being legally accurate lies with the company; and, for this very reason, they should take strong legal counsel to structure the agreement.</p>
<blockquote><p><em>&#8220;Get in touch with MUDS: a consulting firm of impeccable reputation and pan India presence, has experts with immense experience in the related field.&#8221;</em><br />
<em>&#8211; Shweta Gupta , Founder, and CEO, <a href="https://www.muds.co.in">MUDS</a></em></p></blockquote>
<p>The post <a rel="nofollow" href="https://muds.co.in/phantom-stock-can-better-real-stock/">Why Phantom Stock Can Be Better Than Real Stock?</a> appeared first on <a rel="nofollow" href="https://muds.co.in">MUDS</a>.</p>
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