It is common nowadays for employers to offer their employees with shares at some point of time during the business lifetime. And you might reach a place where you too would want to offer your employees with the benefits of having ownership in the company they work for.
With Eqvista, all this is easy to do. Just as you can add shareholders and investors to your cap table, you can do the same for your employees too.
Here is a step by step guide on how to issue shares to an employee from an equity class named – ESOP using Eqvista
Step 1: To begin with, you need to create an equity class from which you would be issuing shares to the employees in your company. Since the shares would be used for the employees, we can name it as ESOPs based on the employee compensation plan that your company chooses for the program.
After you have logged into your account on Eqvista, you would begin with creating an equity class named – ESOPs. For this, click on “securities” on the left-hand side panel of the dashboard. On the drop down menu that comes up, click on “equity share class”.
Step 2: Once you click on “Equity Share Class”, you would be directed to the following page:
As you can see, there is an option at the top right hand side of the dashboard that allows you to create a new equity class. Click on “Create New Equity” to start the process of creating the new equity class, and issue shares to the employees.
Step 3: After you have clicked on “Create New Equity”, you would be directed to the following page:
Here, you would see the option to choose the kind of shares that you want to add in the equity class. In this case, we would choose the option of “common” shares.
Step 4: As soon as you select the equity type – common shares, a drop down page would appear as shown below.
On the form, you would have to fill in details like the “class name” and so on. We have added the class name as ESOP since this group of shares would be issued to the employees under the employee compensation plan selected by the company (and you, the founder).
Other than this, you would have to add in the details like the number of shares reserved, security creation date, and the board approval date. After you have added all the details, click on “Submit”.
Step 5: Once you click on “Submit”, you would be directed to the following page:
Step 6: Now that you have added the new Equity class, you need to create the employee’s profile to whom you would be issuing the shares to. In this case, you would need to add them as a shareholder in the company. This means that you need to create a profile for them in the company profile.
For this, click on “Shareholders” option on the left-hand column of the dashboard as shown below:
Step 7: Once you have clicked on the “Shareholders” option, you would be directed to a page. On this page, you will see all the shareholders that are there in the company as shown below. Since you need to add a new shareholder profile (as the employee profile), you would need to click on “Add Shareholder”.
Step 8: By clicking on “Add Shareholder”, you would get a form will appear at the top of the list of shareholders as shown below.
You would have to add the details like the first name, last name, and the role of the person. Once done, click on “Save”. If you want to add more shareholders, you can click on the button that says, “+add more”.
Step 9: By clicking on “Save”, the shareholder will be added to the list as shown below.
Step 10: From here, you can now issue the shares from the equity class ESOP to the employee you just added in the company profile – in this case – Taylor Stark. But for you to be able to issue shares, there are two ways that you can follow. Each have been explained below in detail:
In the first method, you need to click on “Cap table” on the left-side panel of the dashboard and then on “Detail” from the drop down menu that appears. You would reach the following page:
Here, click on “Issue” from the top right-side corner of the dashboard and then click on “from Shares” in the drop down menu. By clicking on this, you would be directed to the next page as shared in the next step.
The second method includes the process where you can directly issue the shares to the employee from the “Securities” section. For you to be able to do this, click on “Securities” from the left-side panel on the dashboard. From the drop down menu that shows up, click on “equity share class” as shown below:
When you click on this, you would be directed to the following page where you would see the various equity classes that the company has. Here, click on the Equity class that you want to issue the shares from which is ESOP.
Once you click on this, you would be directed to the following page, where you would be able to see the details of the equity class. Click on “Issue shares” from here.
By selecting this, you would be directed to the next page as shared in the next step.
Step 11: Regardless of the method you use above, you would reach the same page. And this next page would allow you to easily issue shares to the employee as shown below:
Here, you need to select the Equity Name from the drop down list as shown above. We have clicked on “ESOP” which was created in the steps before for issuing to employees. Once you have done this, click on “Add a Shareholder” to issue the shares to the shareholder (here, employee) from this equity class.
Step 12: After you have clicked on “Add a Shareholder”, a drop down page would appear as shown below:
As soon as the form open up, select the name of the employee from the drop down list in the field for the “Shareholder name”. In the list, you would find the name of the employee that you just added in the initial steps. Click on the name.
Once you have done this, fill in the other details about the employee in the form below. The details would include the date of issuance, the number of shares issued, the price of the shares at the moment, and the certificate number (share name). Other than this, you would have to select if there is a vesting schedule or not.
Just to let you know, you would see an option to “Add a Shareholder” again at the end of the form. By clicking on this option, you would be able to issue shares to a second person other than the one mentioned in the form above. So, if there are two employees who you want to issue shares too, you can easily do so with this option.
Step 13: Once you have filled all the details, click on “Submit” to finalize the issuance of the shares to the investor and reach to the following page:
From the above, you can see that the shares have been issued to the employee named Taylor Stark here. You can follow the same steps for any other employees that you want to issue shares to.