Startups can now issue stock options to employees for up to 10 years from their incorporation instead of five, the government said on Monday. The ministry of corporate affairs notified changes to the definition of a startup in line with the one issued by the Department for Promotion of Industry and Internal Trade in February last year. As per the notification, startups can issue sweat equity of up to 15% of their paid-up share capital. The ministry has also done away with a provision requiring a listed company that has privately placed its debentures to saside reserves every year. The notification amending the Companies (Share Capital and Debentures) Rules, 2014, addressed the long-standing issue of updating the definition of a startup.

(ET Tech)