Is section 81(1A) of companies act 1956 applicable on pvt. ltd co.??
CS Usha Nimesh
(Querist) 04 August 2011
This query is : Resolved
Hi friends,
can anyone please let me know whether issuance of ESOP (employee stock option plan)in a pvt. ltd co. need special resolution in gen meeting?...
and if posible please provide me a draft of ESOP plan document.
regards
usha
Manish Singh
(Expert) 05 August 2011
there are two questions in your query :
1. Applicability of Section 81 (1A) on private companies -
Ans : No, Sub Section 3 exempts the applicability of Sub-Section 1,1A and 2 of Sec 81 on private companies. But as per the Department's clarification in 1973, the other sub-sections shall be equally applicable on private companies as well.
2. No, issuance of ESOP in a pvt co need not require special resolution. Only go for the Board Resolution.
Do keep in mind to follow teh guideline issued under Section 17 (2) of the Income Tax Act.
CS Usha Nimesh
(Querist) 19 August 2011
your reply has helped me a lot.. thanks for that.
