ESOP Services from Algo Legal

An employee stock option plan (ESOP) is a type of employee benefit plan that offers employees a chance to obtain an ownership stake in their company. At Algo Legal, our professionals help start-ups, high-growth companies, and entrepreneurs craft effective, compliant stock option plans.


Our Clients


Importance of ESOP

Under an ESOP, an employee is granted the right to acquire shares of the company at a future date, subject to the terms and conditions of an option plan and applicable regulations. By giving employees a sense of ownership and aligning interests, companies with well-crafted ESOPs are more productive, more profitable, and have lower employee turnover rates.


What We Offer


  • Assistance in uploading ESOP-related information on a software or tool
  • Complete ESOP life cycle management through the vesting and exercise stage
  • Prepare pre and post cap tables for the vesting and exercise stages
  • Computation of perquisite taxation for the employees at the time of exercise

Sale of shares

  • Prepare computation of tax liability in case of sale of shares
  • Assist with deposit of appropriate taxes based on the calculation

Secretarial Filings

  • Filing of requisite forms with ROC upon vesting, exercise, and sale of shares
  • Amendment in the articles and memorandum of the company
  • Advisory pertaining to prior consent requirement from the investors for the sale of shares

What We Offer

ESOP Scheme and Advisory

  • Advising on the type of scheme depending on the mandate from the company
  • Discussions with the founders
  • Drafting a quality ESOP scheme
  • Advisory note on tax, secretarial and legal compliances on the above

  • Secretarial Documents

    • Preparing secretarial documents for implementation and adoption of a scheme

    • Filings with Authorities

      • Filing of requisite forms with ROC
      • Amendment in the articles and memorandum of the company
      • Advisory pertaining to prior consent requirement from the investors

      Cap table tracking

      • Preparing the pre and post ESOP cap table
      • Real-time tracking of cap table on the ESOP software upon:
        • Each exercise of options by the employee
        • Transfer of shares by employees to other investors

Additional Services

Algo Legal provides comprehensive legal services to venture capital firms, private equity firms, and early-stage businesses, including, but not limited to:

Start-up Recognition

We assist start-ups in obtaining their registration certificate from the Department for Promotion of Industry and Internal Trade (DPIIT). Once registered with DPIIT, start-ups are eligible to receive ESOP for up to 10 years from the date of incorporation.

80 IAC Tax Exemption

After obtaining initial start-up recognition, we help start-ups obtain 80-IAC certificates, which provides for tax holiday for 3 consecutive FY out of the first 10 years since incorporation.

Also, capital gain exemption, under section 54GB of the Income-Tax Act, in the transfer of residential house property provided net consideration is utilized for subscription in equity shares of the start-up.

Angel Tax Exemption

The Angel Tax Exemption is another advantage for qualifying start-ups that have obtained initial recognition. Relief is possible for eligible start-up companies paying tax under section 56(2)(viib) of the Income-Tax Act while raising investment from resident investors at a price higher than the fair market value.

Why choose Algo Legal?

We are committed to building lasting partnerships with our clients. Our experienced professionals provide innovative, solution-oriented representation. To get help with an ESOP, start-up recognition, or any related legal matter, please contact us today for a confidential consultation.


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