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An IPO can provide private companies with huge growth opportunities However, it also subject them to regulations and rules that they weren’t required to comply with as a private company. This is why it’s crucial for companies to be aware of all the possible dangers and risks before taking the leap into public markets.
If your company is thinking of an IPO or not, creating an ideal-practice checklist should be the first step to ensure you’re prepared for the process. The checklist for preparing for an IIPO should cover everything from due diligence to stakeholder alignment, to gathering and analyzing financial data. A thorough checklist will allow you to identify and close the gaps in your company’s state and where it should be prior to ringing the IPO bell.
It’s a smart idea to consult a tax expert if you are planning to go public. This will help you understand the different kinds of equity compensation and how they can affect your tax bill. You can then prepare according to the information you have learned. For instance, if you’ve made an 83(b) choice, be aware that you may be subject to a huge increase in your taxable ordinary income on IPO day. If you’re a shareholder with incentive stock options (ISOs) It is important to prepare for the possibility of an alternative minimum tax liability.
A checklist for preparing an IPO must also provide guidance around the compliance requirements of regulatory compliance that come with an IPO, including the Securities and Exchange Commission’s (SEC) registration and disclosure rules. Your ipo preparation checklist should also include the required steps to prepare and file your Draft Registration Statement / S-1, as well as the submission of both EDGAR and iXBRL instances files.