A public offering offers private companies powerful opportunities for growth, but it also subjects to regulations and rules that they weren’t required adhere to when they were private companies. Therefore, it is essential that companies understand all the risks and obstacles they could face before taking the plunge into public markets.
Whether you are considering an IPO for your company or not, creating an inventory of best practices is the initial step in ensuring you are prepared. A checklist for an IPO must encompass everything from stakeholder alignment to due diligence to gathering and analyzing financial data. A thorough checklist helps you to identify and close holes in your company’s condition and where it should be prior to ringing that IPO bell.
If you’re considering going public, it’s a good idea to consult with an expert in tax to make sure that you are aware of the various forms of equity compensations that could impact your tax bill, and to plan accordingly. For instance, if made an 83(b) choice, be aware that you may be liable to a significant increase in ordinary income tax deductible on IPO day. If you have incentive stock options (ISOs) It is important to plan for the possibility of an alternative minimum tax liability.
An IPO preparation checklist should provide information on 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 outline the necessary steps to prepare and file your Draft Registration Statement/ S-1, including submission of both EDGAR and the iXBRL instance file.