Your ESOP plan, grant letters and approvals, drafted by experienced contract lawyers. We draft to the law that applies to your company and your team and applicable jurisdiction.
Tell us about your team and your cap table. Fixed-fee quote in under 2 hours.
Share where your company is incorporated, where your employees live, roughly how many people will get options, and whether you need a new plan or a review of one you already have. An advocate from our team replies with a fixed quote and a clear plan.
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Plan + Grants · Complete document set
Country Rules · India, US, UK, Germany
Law Checked · November 2026
Fixed Fee · Fully online
An employee stock option plan lets your team buy shares in your company at a fixed price in the future. Most founders understand the idea. The trouble starts in the paperwork: a plan that was never approved the right way, a grant letter that says nothing about what happens when someone leaves, or a strike price with no valuation behind it. Each of these can surface years later, in a funding round or an exit, when it is expensive to fix.
This page is for the moment you want an ESOP Lawyer to draft or review your ESOP documents, in any country.
If you first want to understand how an ESOP works and how it is taxed in India, read our guide to how ESOPs work and are taxed in India. If you are ready to put the plan on paper, you are in the right place.
Companies, and the people they hire. We tell you at the start which side we are on, and we never act for both on the same plan.
Startups and private companies
You want a plan investors will accept and employees will understand. We set up the pool, the plan and the approvals, and keep your cap table clean for the next round. See cap tables and fully diluted ownership.
Employees, executives and advisors
You have an offer with options and you are not sure what it is worth. We review the grant letter and plan, explain vesting, exercise cost, tax and leaver terms, and mark up what is worth asking for. For advisors, see advisor agreements.
Companies with a cross-border team
A US parent with staff in India, or an Indian company with a US team, needs a plan that works in each place. We build one plan with country schedules, and bring in local tax advice where it is needed. See hiring in India for foreign companies.
What we draft, review and set up.
Eight documents and services. Each one is written in plain language so your team can follow it.
1. ESOP plan or policy
The master document: pool size, who can receive options, how the plan is run, and what happens in a sale or a listing.
2. Grant letters and option agreements
The document each employee signs: number of options, price, vesting dates and the rules for exercising.
3. Vesting, cliff and acceleration
Vesting schedules, a cliff, and what happens to unvested options if the company is sold or the employee is let go.
4. Exercise and leaver terms
How long a person has to exercise after leaving, and the difference between a good leaver and a bad leaver. Clear terms prevent disputes.
5. Board and shareholder approvals
Resolutions, notices and filings in the form your country’s law requires. See shareholders agreement drafting for how the plan fits with investor rights.
6. Trust or direct route
Whether the company grants shares directly or through an ESOP trust or special purpose vehicle, and the documents for each.
We read your existing plan and grants, find gaps before an investor does, and fix them. Useful before a round. See term sheet drafting.
Six decisions every ESOP has to make.
Get these right and the rest is paperwork. We take you through each one before we draft.
How big is the pool?
Many startups reserve a slice of the company for future hires, and investors often ask for it to be set before a round. We help you size it against the hiring plan, not a guess.
What is the vesting schedule?
Four years with a one-year cliff is common. The cliff means nothing vests until the first year is complete. In India, the law requires at least one year between grant and first vesting.
What is the exercise price?
The price an employee pays per share. It must be backed by a valuation in most countries. Too low can create tax problems. Too high makes the option worthless.
What happens when someone leaves?
Set the exercise window and the good and bad leaver rules in advance. A 90-day window is common in the US. Longer windows are kinder but cost the cap table more.
What happens in a sale?
Do unvested options speed up, get swapped for new ones or lapse? Decide before a buyer asks.
How will it be taxed?
Tax usually applies when options are exercised and again when shares are sold, but the details differ by country. The tax route shapes the plan, so we look at it first.
Offered an ESOP? Questions to ask before you sign.
Options are not cash. Their value depends on the company’s future, the exercise price, the tax and the rules for leaving. Before you accept, ask:
How many shares exist in total, so you can see what your options are worth as a share of the company?
What is the exercise price, and what valuation was it based on?
What is the vesting schedule, and is there a cliff?
How long do I have to exercise if I leave, and what happens to vested options if I am dismissed?
Who pays the tax when I exercise, and can I sell the shares to pay it?
What happens to my options if the company is sold or listed?
If the answers are not in the documents, they are not promises. We review ESOP offers for employees and executives, and we put the answers in writing. If you are being hired, see also our guide to employment contract drafting by country.
ESOPs by country.
Only the countries with a dedicated option or share-incentive rule get their own section. Pick the country where your company is set up, then check where your employees live.
India
Companies Act 2013 (section 62(1)(b)), Rule 12 of the Share Capital and Debentures Rules 2014, Income-tax Act, FEMA, SEBI SBEB Regulations 2021 for listed companies
A private company needs shareholder approval for its ESOP scheme, usually by special resolution.
At least one year must pass between grant and the first vesting.
Promoters and the promoter group cannot receive options. A DPIIT-recognised start-up can grant to promoters and directors above 10% for 10 years from incorporation.
Tax is charged twice: as salary when options are exercised, and as capital gains when shares are sold. Eligible DPIIT start-ups can defer the first tax.
Allotting shares to a non-resident employee brings FEMA rules and an FC-GPR filing within 30 days. Cash-settled options are an alternative.
Internal Revenue Code sections 409A, 422 and 83, federal and state securities law
The board adopts an equity incentive plan. For incentive stock options, shareholders must approve the plan within 12 months before or after adoption.
Incentive stock options (ISOs) go to employees only. Up to $100,000 of options can first become exercisable per person per year as ISOs. The rest are treated as non-qualified options (NSOs).
The strike price must be at least fair market value, supported by a 409A valuation. Holders of more than 10% need a higher price and a shorter term.
Contractors and advisors get NSOs. A common exercise window after leaving is 90 days.
Early exercise with a section 83(b) election, and the securities-law exemption (Rule 701), are common points in startup plans.
Section 19a of the Income Tax Act lets employees of qualifying start-ups defer tax on shares until a later event instead of paying on receipt. The Future Financing Act widened it.
A transfer of GmbH shares needs a notary, which is why many German start-ups use virtual options (VSOPs) or profit participation rights instead.
Direct options for a GmbH need a careful setup of the share capital and approvals.
Germany has no ESOP regime like the UK’s EMI. Structure and tax advice go together.
UAE, Singapore, Australia, Canada, France and Argentina
General company, employment and tax law
We draft the plan under the company law of your country and coordinate local tax advice.
Some of these countries have special tax rules for employee shares or options. Others tax the gain under general rules. Tell us where your employees live and we will say what needs local sign-off.
The UAE has no personal income tax for most residents, so the planning focuses on company approvals and the employee’s home-country tax.
Employees in a different country from the company add a second set of rules. We handle that with country schedules under one plan.
Real options, phantom options or something else?
Real stock options. The employee can buy actual shares. This is the usual route where the law and tax work. It affects the cap table and needs company approvals.
Phantom stock or cash-settled options. The employee gets a cash payment linked to the share price, not shares. It avoids changing the cap table and can suit foreign employees or advisors, but the payout is usually taxed as pay. See phantom stock versus ordinary shares.
Founder equity. Founders’ own shares and vesting are a different job, handled in a founders agreement and a shareholders agreement. When a co-founder leaves, see what happens to their equity.
How it works.
Four steps, all online, with a fixed fee.
1. Tell us about your company
Where it is incorporated, where your team lives, how many people will get options, and any plan you already have.
2. We scope and quote
A clear recommendation on the structure and a fixed quote within 2 hours. No hourly billing.
3. We draft the documents
An advocate drafts the plan, grant letters and approval papers, with a short plain-language note on the choices that matter.
4. Approve, grant and file
We update the drafts until they fit your deal, and tell you which approvals, filings and valuations come next. Most plans are ready in 3 to 6 days.
We draft ESOP documents to the published statute and settled rules of the countries above, as an international team of advocates and not a local law firm in each country.
We do not give tax filing services, run your ESOP administration software, or certify valuations. For these we work with your accountant, your valuer and, where needed, local counsel. We tell you at the start what needs a local sign-off.
This page is general information and is not legal or tax advice for your situation. The law of your country decides the detail. An advocate-client relationship begins only when we confirm an engagement in writing.
Frequently asked questions about ESOP drafting
What does an ESOP lawyer do?
An ESOP lawyer drafts the plan and the grant documents, gets the company approvals right, and makes sure the terms match the law and the tax rules of the countries involved. They also review existing plans and offers, and fix gaps before an investor finds them.
What documents do I need to set up an ESOP?
You need an ESOP plan or policy, board and shareholder approvals, and a grant letter or option agreement for each person. Most countries also need a valuation to set the price. Some need filings with the authorities.
Can a private company issue ESOPs?
Yes. A private company needs shareholder approval under the Companies Act.
What is a cliff?
A cliff is a waiting period at the start of vesting. If the cliff is one year, nothing vests until the first year ends. If an employee leaves before that, they usually get no vested options.
Can contractors and advisors get ESOPs?
Often yes, but the rules differ. In the US, contractors get non-qualified options, not ISOs. In India, the Companies Act scheme is for employees and directors, so advisors usually need a different structure. Our guide to advisor agreements covers this.
What happens to my options when I leave?
It depends on the plan and the grant letter. Vested options usually must be exercised within a set window, such as 90 days in many US plans. Unvested options normally lapse. A bad leaver, such as someone dismissed for misconduct, may lose even vested options if the plan says so.
How are ESOPs taxed?
In many countries, tax applies when options are exercised and again when the shares are sold. The rates, timing and relief differ. India taxes the gain on exercise as salary and the later gain as capital gains. The UK has the EMI scheme with favourable treatment. The US splits options into ISOs and NSOs. Check the country section above, then take tax advice for your own case.
Can I give ESOPs to employees in another country?
Yes, but you need to check company law, securities law, exchange control and tax in the employee’s country. A US company giving options to staff in India, for example, must consider Indian tax for the employee. We build one plan with country schedules to handle this.
Is phantom stock better than ESOPs?
Neither is better in general. Real options give employees actual shares, which many prefer. Phantom stock avoids changing the cap table and can suit foreign staff, but it is taxed as pay. We explain the trade-off for your case.
How much does ESOP drafting cost, and how long does it take?
You get a fixed fee within 2 hours of sending your details. Most plans are ready in 3 to 6 days. A multi-country plan takes longer, and we confirm the timeline in the quote.
This page is written and reviewed by Prakhar Rai, an advocate enrolled with the Bar Council of India, an alumnus of the National Law School of India University (NLSIU), Bangalore, with a Master of Business Laws, and the founder of My Legal Pal. His practice covers startup and commercial contracts, including equity incentive plans, for companies in India and abroad.
Law checked as of 7 November 2026 against statutes, official releases and law-firm updates. Reviewed for legal accuracy by Prakhar Rai, Advocate (Bar Council of India). Last updated: November 2026.
