An IPO offers private companies powerful growth opportunities However, it also subject them to rules and regulations they were not required to follow as a private business. As such, it is crucial for businesses to understand all the possible risks and challenges before taking the leap into public markets.
If you’re considering an IPO for your business or not, establishing guidelines for best practices is the first step in making sure you are ready. A checklist for an IPO must be able to cover everything from stakeholder alignment to due diligence to analysis and collection of financial data. A thorough checklist helps you to identify and close holes in your company’s state and what it needs to be before ringing that IPO bell.
If you’re considering going public, it’s a good idea to consult with an accountant to make sure you’re due diligence aware of the various forms of equity compensation that can impact your tax burden, and plan in accordance with the tax implications. For instance, if made an 83(b) decision, you should be aware that you could be subject to a substantial increase in ordinary income tax deductible on IPO day. If you have incentive stock options (ISOs) it’s important to plan for the possibility of an alternative tax liabilities that are minimal.
An ipo preparation checklist should include guidance on the regulatory compliance requirements associated with an IPO that includes the Securities and Exchange Commission’s (SEC) registration and disclosure rules. Your ipo preparation checklist should also contain the essential steps for preparing and filing your Draft Registration Statement/ S-1, which includes the submission of both EDGAR and the iXBRL instance file.