Скачать или смотреть ESOP vs Sweat Equity Explained | Startup Ownership & Equity Planning (Hindi)

Team ko ownership deni hai, par samajh nahi aa raha — ESOP do ya Sweat Equity?

Don’t worry! In this video, we break down both options — simple language, real examples, and clear legal differences.

👉 What You’ll Learn:

What is ESOP (Employee Stock Option Plan)?
Future-based reward — gives employees the right (not immediate shares) to buy equity later at a fixed price.

What is Sweat Equity?
Immediate reward — gives direct shares to co-founders, advisors, or team members for their effort or expertise instead of cash.

Key Differences Between ESOP & Sweat Equity:

Ownership timing: ESOP (later) vs Sweat Equity (now)
Tax treatment: ESOP taxed twice; Sweat Equity taxed on allotment
Who gets it: Employees vs Founders/Advisors
Dilution timing: ESOP at exercise, Sweat Equity immediate
Legal requirement: Sweat Equity needs board + ROC approval

When to Use What:
✅ Choose ESOP to retain long-term employees or team members.
✅ Use Sweat Equity when rewarding early contributors, advisors, or co-founders without cash.

Legal & Compliance Checklist:

ESOP: Proper plan, vesting schedule & exercise price required
Sweat Equity: Needs valuation, special resolution, ROC filings (MGT-14, PAS-3, SH-7)
Always consult a CA or legal expert before issuing shares.

Pro Tip:
ESOP = Long-term motivation
Sweat Equity = Immediate recognition

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