I am in the process of setting up a tech startup in Singapore. One of the items on the agenda is implementing an employee stock option plan.
I asked my accounting company to create unallocated shares to reserve for the pool, to which I received a reply that it is not possible. She said,
She recommended instead issuing shares on the spot as the options issued to a particular employee mature. But that's tricky: as our valuation will change and new investors will come in, the allotted portion will change, too.Treasury shares do exist in Singapore. However, it is a very extensive procedures as it will involve among other things such as declaration of solvency by directors, approval by shareholders, publicity of the same for creditors to file objections, if necessary, etc.
This is a less recommended way as it is quite a long process.
What is the way it is normally done?
Is that according to the shares the cofounders own?