It is common nowadays for employers to offer their employees shares at some point of time during the business. And you might reach a place where you too would want to offer your employees 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. As the shares would be used for the employees, we can name them 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– 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 “Equities”. Once you click here, you would be directed to the following page:
As you can see, there is an option that allows you to create a new equity class. Click on “Create New Class” to start the process of creating the new equity class, and issue shares to the employees.
Step 2: After you have clicked on this, 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 3: As soon as you select the equity type – common shares, another option will appear allowing you to name the equity class.
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). Once done, click on “Submit”.
Step 4: With this, you would be directed to the following page where you can move ahead to start issuing shares to the employee. There are two options that you will see:
Search – This option allows you to search for the shareholder profile and then select the profile to issue shares to them. To search for the shareholder, just type in the name in the field below and the shareholder’s name will appear on the right side panel with a “Select” button. By clicking on the button, you can then issue the shares to this shareholder.
If you have not added the shareholder profile already, you can learn how to do it here or follow the second option!
Add new shareholder – This option allows you to add a new shareholder right at the same time while you issue the shares to them as well. In this case, we are following this option.
Here, you have two more options when you click on “Add new shareholder”. The shareholder you are adding can be an individual or a company. We selected “Individual” in this case. Add in the details and make sure you select the role as “Employee” when doing so. Once done, click on “Submit new shareholder”.
Step 5: Once done, you will reach the next page where you can begin the process of issuing the shares to the employee.
Here, add in the details like the number of shares, the price per share at the time of the issuance, the date of issuance and the share name. After this, you will get the option to add a vesting schedule. If you want to add one, click on “Yes”. In this case, we selected “No” (which is also the default selection).
Note: To learn how to implement a vesting schedule, click here!
Once done, click on “Submit”.
Step 6: With this, the shares would have been issued and you will be directed back to the page where you can see the ESOP equity class and all the grants issued under it.
To view the grant you just issued, click on “E-001” which is the grant name.
Step 7: With this, you will be taken to the page where you can see the issuance details as shown below:
From the above, you can see that the shares have been issued to the employee. You can follow the same steps for any other employees that you want to issue shares to.