IPO Preparation Checklist
A public offering offers private companies powerful opportunities for expansion, but it also exposes to regulations and rules they weren’t required to follow when they were private firms. It is therefore important that companies are aware of all the risks and challenges they might face prior to taking the plunge into public markets.
If you are contemplating an IPO for your business or not, creating guidelines for best practices is the initial step to ensure that you are well-prepared. A checklist for preparing for an IPO should include everything from due diligence to stakeholder alignment, to the gathering and analysis of financial data. A thorough checklist will help you to pinpoint and close gaps between where your company is at and where it must be prior to bells ringing for the IPO bell.
If you’re thinking of going public, it’s a good idea to consult with an experienced tax professional to ensure you’re aware of the different kinds of equity compensations that can impact your tax bill, and to plan in accordance with the tax implications. For example, if you’ve made an 83(b) election, be aware that you could be liable to a significant jump in taxable ordinary income on IPO day. Also, if you’re a shareholder with incentive stock options (ISOs), it is important to plan for the possibility of an alternative tax liabilities that are minimal.
A checklist for preparing an IPO must also provide information regarding the regulatory compliance requirements that go along with an IPO which includes the Securities and Exchange Commission’s (SEC) registration and disclosure rules. Your IPO checklist should outline all the steps required to prepare and file your Draft Registration Statement /S-1 as well as submissions of both EDGAR files and iXBRL examples.