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CS Executive · Capital Market and Securities Laws · Share Based Employee Benefits and Sweat Equity

Orion Retail Ltd, a listed company, wants to introduce an ESOP scheme. Which approval is required from shareholders for the scheme under the SEBI regulations and the Companies Act, 2013?

A listed company needs approval of its shareholders by a special resolution passed in a general meeting before implementing an ESOP scheme. A Board resolution alone is insufficient, and approval of the Registrar or debenture holders is not the requirement.

  1. AA special resolution passed by the shareholders in a general meetingCorrect
  2. BAn ordinary resolution passed by the Board only
  3. CApproval of the Registrar of Companies before grant
  4. DA resolution of the debenture holders

Explanation

A company can implement an ESOP scheme only if it is approved by the shareholders by a special resolution in general meeting. A Board resolution alone is insufficient, and neither the ROC nor debenture holders approve the scheme.

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