# Cap Table Management

> A cap table records who owns what in the company on a fully diluted basis — equity shares, CCPS, convertible notes, ESOPs granted and unallocated, and warrants. It must match the register of members, allotment filings and demat records. We maintain it, model how each new round and ESOP pool dilutes everyone, and show how proceeds would be split on an exit under the liquidation preferences agreed.

Practice: Startup Funding, ESOP & Valuation — https://www.industax.com/services/startup-funding/

Spreadsheet cap tables drift away from legal records: conversions not reflected, ESOP lapses missed, or transfers never recorded. We reconcile the cap table with the register of members, PAS-3 and SH-7 filings and ISIN records, then keep it updated after every event.

For a new round we model pre- and post-money ownership, the effect of creating an option pool before the round, and the exit waterfall — so founders know what a given valuation and preference stack really means for them.

## Key facts

| Item | Detail |
| --- | --- |
| Instruments tracked | Equity, CCPS, CCDs, notes, ESOPs, warrants |
| Must match | Register of members, PAS-3, SH-7 and demat records |
| Demat | Non-small private companies must hold securities in demat form |
| Modelling | Round dilution, option pool, exit waterfall |

## Who needs this

- Startups between rounds
- Founders negotiating a term sheet
- Companies with ESOPs and convertibles outstanding

## What's included

- Cap table build and reconciliation
- Round and pool modelling
- Exit waterfall analysis
- Event-by-event updates

## Documents

- Register of members and allotment filings
- Investment agreements
- ESOP grant records

## Process

1. **Reconcile** — Cap table matched to statutory records.
2. **Model** — Dilution and waterfall scenarios built.
3. **Maintain** — Updated after every allotment, transfer or grant.

## FAQs

### What does fully diluted mean?

Ownership calculated as if every convertible instrument and ESOP option had been converted or exercised.

### Why does creating an option pool before the round hurt founders?

Because a pool sized pre-money dilutes only existing shareholders, not the incoming investor.

### Does the cap table need to match ROC filings?

Yes. Investors check the cap table against the register of members and allotment filings, so differences delay closings.

## Official sources

- Ministry of Corporate Affairs — MCA21: https://www.mca.gov.in/

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Canonical page: https://www.industax.com/services/startup-funding/cap-table-management
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.