An IPO provides private companies with powerful growth opportunities however, it also entails them to regulations and rules they weren’t required to follow as a private company. It is therefore important that companies understand all the risks and obstacles they might face prior to making the move to public markets.
Whether your company is considering an IPO or not, developing an ideal-practice checklist should be the first step in ensuring that you’re ready for the process. The checklist for preparation for an IPO https://designdataroom.com/what-you-need-to-know-about-ipo-process/ should cover everything from due diligence to stakeholder alignment to the gathering and analysis of financial data. A thorough checklist allows you to pinpoint and close gaps in your company’s current state and what it needs to be prior to ringing that IPO bell.
If you’re considering going public, it’s best to consult a tax professional to ensure that you’re aware of the different types of equity compensation that can impact your tax burden, and to plan in accordance with the tax implications. For instance, if made an 83(b) option, be aware that you may be subject to a large increase in taxable ordinary income on IPO day. If you have incentive stock options (ISOs) it’s important to plan for the possibility of alternative minimum tax liability.
A checklist for IPOs should also contain information on the requirements for compliance with regulatory regulations which are a part of an IPO. This includes the Securities and Exchange Commission (SEC) regulations regarding disclosure and registration. Your IPO checklist should outline all the steps needed to prepare and submit your Draft Registration Statement /S-1 and include submissions of both EDGAR files and iXBRL instances.