Cap table: meaning, fully diluted basis and how to maintain it
A cap table lists who owns a company's shares, options and convertibles, and each holder's percentage. Investors rely on it for valuation and dilution.
Short answer
A cap table, short for capitalisation table, is a record of a company's ownership: who holds equity shares, preference shares, convertible instruments and stock options, and what percentage each holds. It is usually maintained on both an issued basis and a fully diluted basis, which assumes all convertibles convert and all options are exercised.
- Shows
- Shareholders, instruments, percentages
- Fully diluted
- Includes convertibles and ESOP pool
- Must match
- Register of members, MGT-7, FEMA filings
- Updated
- After every allotment, transfer or grant
How a cap table works
Suppose two founders hold 5,000 shares each and the company creates an ESOP pool of 1,000 options. On a fully diluted basis there are 11,000 shares, and each founder owns about 45%. If an investor then subscribes to CCPS convertible into 2,750 shares, the fully diluted total becomes 13,750, and each founder falls to about 36%, the pool to about 7% and the investor to 20%. Pre-money and post-money valuations, price per share and option pool shuffles are all modelled in the cap table.
Keeping it accurate
The cap table is a working document, but it must agree with the company's legal records: the register of members, allotment filings in PAS-3, the annual return, the ESOP register and FEMA reports such as FC-GPR. Mismatches are common in early startups that skipped share certificates, unrecorded transfers or informal promises of equity, and they surface in due diligence. Fixing them may need confirmatory resolutions, late filings or compounding.
Why it matters for startups
Investors price rounds, check dilution and verify ownership from the cap table, and employees see the value of their options through it. Maintain it in one controlled file or cap table tool, reconcile it with statutory registers after every event, and avoid informal equity promises that are not documented.
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Sources
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
What is a fully diluted cap table?
One that counts all shares that would exist if every convertible instrument converted and every option was exercised, including the unallocated ESOP pool.
Is a cap table filed with the government?
Not as such, but the information in it appears in statutory registers, ROC filings and FEMA reports, which must all match.
Who maintains the cap table?
Usually the founders or finance team, with the company secretary reconciling it with statutory records.