Insights
Private Markets Intelligence
Guides on ESOP taxation, cap tables, secondary transactions, and India's private market ecosystem.
What is Form No. SH-4 (Share Transfer Form) Under Companies Act 2013
Form SH-4 is the mandatory share transfer instrument prescribed under Section 56 of the Companies Act, 2013 that must be executed whenever unlisted company shares change ownership through sale, gift, or any voluntary transfer. Form SH-4 provides evidence that: 1. The transferor (seller) agrees to transfer specific shares 2. The transferee (buyer) agrees to receive those shares 3. The consideration amount that has been agreed for the transfer 4. Both parties acknowledge the transaction via
Can the Board Reject Share Sales in Private Companies?
Boards in private companies can and often do reject share transfers as they have legal power to do so if the Articles of Association grant discretion. In the case of most private companies, their Articles do contain such provisions. However, this power is not unlimited. Rejections must be in good faith, for legitimate business reasons, and cannot be oppressive or discriminatory. If you're selling shares: * Check Articles and Shareholders Agreement first * Get ROFO/ROFR waivers before finding
Can a Company Prevent Employees from Exercising Vested stock options (ESOP)?
No, a company generally cannot prevent employees from exercising vested stock options unless the ESOP scheme or grant letter contains specific, legally valid conditions such as 1. Employment continuation required and you've left 2. Performance conditions not met 3. Blackout period in effect 4. Regulatory approvals pending 5. TDS not provided by employee 6. Clear mention that exercise is only possible during events like IPO, secondaries, etc. 7. Specified that exercising can only happen d
ESOPs vs RSUs: The Complete India Guide for Employees and Founders (2026)
ESOPs give you the right to purchase shares at a fixed price after vesting. You must pay the exercise price to convert options into shares. RSUs, by contrast, promise to deliver shares automatically upon vesting with no purchase required. In India, ESOPs are taxed at exercise, while RSUs are taxed at vesting. This timing difference creates distinct cash flow pressures, especially for employees at private companies where shares cannot yet be sold. The choice between the two typically reflects co