IPO Preparation Checklist
Public offerings offer private companies powerful opportunities for expansion, but it also exposes them to rules and regulation they were not required follow when they were private firms. It is crucial for companies to be aware of all the possible dangers and risks before taking the plunge into public markets.
If your company is thinking of an IPO or not, establishing the best-practice checklist is the first step in ensuring that you’re ready for the process. A checklist for an IPO must cover everything from stakeholder alignment due diligence to the collection and analysis of financial data. A thorough checklist can help you to identify and close gaps between where your business is at and where it should be prior to making the IPO bell.
If you’re planning on going public it’s a good idea consult with a tax professional to ensure that you’re aware of the different kinds of equity compensation that could affect your tax bill and plan in accordance with the tax implications. If you have made an 83b) choice, you could encounter a significant increase in the taxable ordinary income if you go public. If you’re a shareholder with incentive stock options (ISOs) it is important to be prepared for the possibility that you will be subject to alternative minimum tax.
A checklist for IPOs should also include information regarding the compliance requirements of regulatory authorities that are associated with an IPO. This includes the Securities and Exchange Commission (SEC) regulations regarding registration and disclosure. Your IPO checklist should outline all the steps needed to prepare and file your Draft Registration Statement/S-1 as well as submissions of both EDGAR files and iXBRL examples.
