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Regulatory Updates

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VC Funding and treatment of ESOP – Part IV of the Series

This is the fourth part of the Series on ESOP. We’ll discuss about how Venture Funds view Employee Stock Option Plan (ESOP). Almost always VC’s investment is on a fully-diluted-basis (FDB for short). FDB means the number of shares that

By Sharda Balaji almost 12 years ago
De-mystifying ESOP Implementation – Part III of the series

It is nice to have you come back for more. In this post, we’ll cover the nuances for implementing an Employee Stock Option Plan (ESOP) through a Trust (formed under the Indian Trusts Act) This is a little complex compared

By Sharda Balaji almost 12 years ago
De-mystifying ESOP Implementation – Part II of the series.

The previous post covered the Basic Primer on Employee Stock Option Plan (ESOP/ Plan) In this post, we’re going to chart out a clear ‘How To’ process for Startups. Most startups know about ESOP Trust. May be, because amongst the

By Sharda Balaji almost 12 years ago
All about ESOPs – Part I of the series

An Employee Stock Option Plan (ESOP) is an option given to the employees to buy the shares of the Company. Until the option is exercised and converts into a share, an option holder does not get any shareholder rights of

By Sharda Balaji almost 12 years ago
Present Sir ! Board meetings through video conferencing counted for Quorum.

After almost 13 years of constant request by the industry, Ministry of Corporate Affairs (MCA) considers Directors attending Board / Committee Meetings through video conferencing as valid quorum. Read the circular here http://goo.gl/HhI1f. I remember program co-ordinating Companies Bill, 1997 held

By Sharda Balaji over 12 years ago
Creation of ESOP Trust - Why complicate?

Many small sized organizations prefer to have the Board approving the grant of stock Options. In large organizations, they either have a Compensation Committee or set up a Trust. Many Indian companies, including Infosys Limited, have used trust route to

By Sharda Balaji over 12 years ago
Foreign Direct Investment is now permitted in LLPs

The Cabinet Committee on Economic Affairs (CCEA) on the 11May 2011 approved the proposal to amend the policy on allowing Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP) firms. A Notification to this effect (which covers minutia) is still

By Sharda Balaji over 12 years ago
Liquidation Preference. Does it really work?

Liquidation Preference, simply put, is a term used in venture capital contracts to specify that the investors get paid in preference to other parties. The shareholders agreement (SHA) describes how much they get paid and in preference to whom. SHA,

By Sharda Balaji over 12 years ago
Working on your start-up in stealth-mode while being employed?

It takes time from ideation to actual execution. Those who are employed many a time would like to have the cushion of a monthly salary when still perfecting the idea and getting close to execution, so that the bills can

By Sharda Balaji over 12 years ago
Choosing an Advisory Board for Startups

We all need a sounding board to bounce off our thoughts and get good advice. For startups it is a very valuable and powerful management tool, to have an experienced person who has ‘been there and done that’ to actually

By Sharda Balaji almost 13 years ago
Founders' Agreement

Most founders begin their startup with their friends, colleagues or someone who they have known in the past. The earlier social relationship is now an economic relationship and it is essential to have a strong contractual agreement. There are some

By Sharda Balaji almost 13 years ago
Limited Liability Partnership

LLP, a legal form available world-wide is now introduced in India and is governed by the Limited Liability Partnership Act 2008, with effect from April 1, 2009. <link> http://www.mca.gov.in/MinistryWebsite/dca/actsbills/pdf/LLP_Act_2008_15jan2009.pdf. LLP combines the advantages of ease of running a Partnership and

By Sharda Balaji almost 15 years ago