An IPO gives private companies huge growth opportunities, but it also subjects them to rules and regulations that they weren’t required to comply with as a private business. Therefore, it is essential that companies understand all the risks and obstacles they could face prior to making the move to public markets.
If you are contemplating an IPO for your business or not, creating a checklist of best practices is the first step in making sure you are prepared. A checklist for an IPO should encompass everything from stakeholder alignment to due diligence to gathering and analyzing financial data. A thorough checklist will allow you to identify and close gaps between where your company is and where it should be prior to you ring the IPO bell.
It is a good idea to consult a tax professional if you’re planning on going public. This will help you understand the different types equity compensation and how they impact your tax bill. You can then plan according to your needs. For instance, if made an 83(b) election, be aware that you could be subject to a huge increase in your taxable ordinary income on IPO day. Also, if you’re holding incentive stock options (ISOs) It is crucial to consider the possibility of alternative minimum tax liability.
A checklist for ipo should also include information on the requirements for compliance with regulatory regulations that are associated with an IPO. This includes the Securities and Exchange Commission (SEC) rules on registration and disclosure. Your IPO checklist should include all the steps needed to prepare and submit your Draft Registration Statement/S-1 and include submissions of both EDGAR files and iXBRL cases.