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A public offering offers private companies with a lot of opportunities for growth, but it also entails exposing to regulations and rules they weren’t required to adhere to when they were private firms. Therefore, it’s crucial for businesses to understand all the possible dangers and risks before taking the leap into the public market.
If your company is thinking of an IPO or not, developing an effective checklist is the first step to ensure you’re ready for the process. A checklist for an IPO should include everything from stakeholder alignment and due diligence to the collection and analysis of financial data. A thorough checklist will allow you to pinpoint and close gaps between where your company is and where it must be prior to you ring the IPO bell.
If you’re planning on going public it’s a good idea consult a tax professional to ensure that you’re aware of the different types of equity compensations that can impact your tax bill, and to prepare accordingly. If you have made an 83b) election, you may have a substantial increase in the taxable ordinary income if you go public. If you’re an owner of incentive stock option (ISOs), you should consider the possibility of being be subject to alternative minimum tax.
A checklist for preparing an IPO must also provide information regarding the regulatory compliance requirements that go along with an IPO and should include 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 or S-1, which includes the submission of both EDGAR and instances of iXBRL.