Under an ESS, the employee is issued shares upfront.
Under an ESOP, the employee is granted options, which can only be converted into shares at a later date once the vesting conditions have been satisfied.
Startups use ESOPs to attract, retain and incentivize top talent.
Yes. The tax concession for startups allows employees who otherwise would have to include the amount of a discount in their assessable income to disregard that amount where certain conditions are met.