Question 1

What is Rule 11UA valuation?

Accepted Answer

It is a method prescribed under Income Tax Rules to determine fair market value of unquoted shares.

Question 2

When is share valuation required?

Accepted Answer

During share issuance, fundraising, ESOP allocation, and certain transfers.

Question 3

What is DCF valuation?

Accepted Answer

Discounted Cash Flow method values a company based on projected future cash flows.

Question 4

What is NAV method?

Accepted Answer

Net Asset Value method values a company based on its assets and liabilities.

Question 5

What is Angel Tax under Section 56(2)(viib)?

Accepted Answer

It is a tax levied when shares are issued at a price higher than fair market value.

Question 6

Who can issue valuation report?

Accepted Answer

A registered valuer or qualified professional as per applicable regulations.

Question 7

What is SEBI compliance?

Accepted Answer

SEBI compliance involves adhering to regulations issued by the Securities and Exchange Board of India for listed companies and market participants.

Question 8

Who needs SEBI compliance services?

Accepted Answer

Listed companies, intermediaries, startups planning IPOs, and investors dealing in securities.

Question 9

What are LODR regulations?

Accepted Answer

LODR governs disclosure and compliance requirements for listed entities.

Question 10

What is insider trading compliance (PIT)?

Accepted Answer

It involves regulations to prevent misuse of unpublished price-sensitive information.

Question 11

Can non-listed companies require SEBI advisory?

Accepted Answer

Yes, especially if they are planning fundraising, IPOs, or dealing with securities.

Question 12

What is an ESOP?

Accepted Answer

An ESOP (Employee Stock Option Plan) allows employees to purchase company shares at a predetermined price, creating ownership and long-term incentives.

Question 13

Who can implement ESOPs?

Accepted Answer

Private limited companies and startups commonly implement ESOPs for employee retention and growth.

Question 14

Are ESOPs taxable in India?

Accepted Answer

Yes, ESOPs are taxed at two stages — at the time of exercise (as perquisite) and at the time of sale (capital gains).

Question 15

Why should companies offer ESOPs?

Accepted Answer

ESOPs help attract top talent, improve retention, and align employee performance with company growth.

Question 16

Can ESOP plans be customized?

Accepted Answer

Yes, ESOP structures can be tailored based on company size, goals, and funding strategy.

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