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    Question

    Employee Stock Option Plan (ESOP)

    requires:
    A RBI approval Correct Answer Incorrect Answer
    B Mandatory lock-in condition Correct Answer Incorrect Answer
    C Specific eligibility conditions Correct Answer Incorrect Answer
    D Government notification Correct Answer Incorrect Answer
    E No conditions Correct Answer Incorrect Answer

    Solution

    SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 govern ESOPs. Conditions include: • Eligibility: permanent employees, directors (excluding promoters/independent directors). • Vesting: minimum 1 year before exercise. • Disclosure: details in board report.  Thus, conditions are mandatory for ESOPs to protect shareholder interests.

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