An IPO gives private companies huge growth opportunities but it also exposes them to rules and regulations that they weren’t required to comply with as a private business. Therefore, it’s crucial for businesses to understand all the risks and challenges before taking the leap into the public market.
If your business is contemplating an IPO or not, developing an ideal-practice checklist should be the first step to make sure that you’re ready for the process. A checklist for an IPO should cover everything from stakeholder alignment and due diligence to analysis and collection of financial data. A thorough checklist will allow you to discover and close holes in your company’s condition and where it should be prior to ringing that IPO bell.
It’s a smart idea to consult a tax professional if you plan to go public. This will assist you in understanding the different kinds of equity compensation, and how they impact your tax bill. You can then plan according to your needs. If you’ve made an 83b) choice, you could have a substantial increase in your taxable income if you go public. If you have incentive stock option (ISOs) it is important to plan for the possibility of being be subject to an alternative minimum tax.
A checklist for ipo should also include information about the compliance requirements of regulatory authorities that are required for an IPO. This includes the Securities and Exchange Commission (SEC) rules for registration and disclosure. The checklist for preparing your IPO should also outline the necessary steps to prepare and file your Draft Registration Statement or S-1, including submission of both EDGAR and iXBRL instance files.
