- An unlisted company issuing employee stock options has to comply with the provisions of the Rule 12 of the Companies (Share Capital &: Debentures) Rules, 2014.
- As per Regulation 1(3) of the SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021, the provisions of the regulations shall apply to listed company and has a Share Based Employee Benefit Scheme.
- Purpose of the Regulations: A company always wants to retain the top talent in the company those working for the future success of the organization. Further, the human capital or the work force is always the vital component of a business organization and those executives who possess the potential to take the organization to newer height need to be remunerated suitably. One of the key non-financial remuneration or incentive may be issued to the employee in form of Employee Stock Option.