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Section 201(a) of the JOBS Act repealed the ban on generally soliciting or generally advertising private securities offerings, provided certain conditions were met. Many people believed that this change in the law would be one of the most dramatic brought about by the JOBS Act. But things didn'
Convertible Promissory Notes
Seattle startup lawyer outlines QSBS redemption issues and 2025 OBBBA updates to Section 1202: new asset cap, partial exclusions & updated holding periods.
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Broad-based employee stock ownership is one way to ensure that the wealth created in startups is widely shared by those who helped create the wealth. But broad-based stock ownership in private companies is thwarted by our tax code. Our tax code discourages the sharing of stock ownership among a company&
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I have heard this a number of times in regards to S Corporations & Blank Check Preferred Stock: "A corporation cannot make an S election if it has preferred stock authorized in its charter, even if the preferred stock is 'blank check,' meaning it doesn't
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Restricted Stock Units (RSUs) are not a good choice of equity compensation for a startup. RSUs work great for big public companies, like Amazon or Microsoft. And sometimes RSUs can work great for private companies. But it has to be a really unique private company for RSUs to make sense.
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Warrants can be confusing from a tax point of view. There are a couple of reasons for this. But the primary reason is probably that how a warrant is taxed is driven. Warrants are by the factual circumstances under which it was issued. Was it issued as part of an
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Dan Wright and Joe Wallin If you are going to raise money through a crowdfunding campaign, you need to think through the tax consequences before you start. You might have to collect sales taxes. You might also have to pay federal income taxes on the funds you raise, in the
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Stock option plan administration requires regular attention to compliance obligations. Events to Watch Out For There is work to do when: * the board of directors approves stock option grants (or stock awards), which can occur either at regularly scheduled board meetings or at any time at special board meetings or
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It is well known that a company has to withhold income and employment taxes from an employee exercising nonqualified stock options. What About Former Employees? What is less well known is, what do you do if this person has left the employment of the company? What if they left employment
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By Nikki Piplani and Joe Wallin If you are a startup company founder, one of the first questions you will have will be about sharing equity with your early hires. Once you start asking, you will hear plenty of advice about this. You will hear— “Be generous”. You will also
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In startup land, aside from cash compensation, stock options are the most important part of employee compensation. (This is the case because once a startup is beyond the very early, initial startup phase, no other form of equity compensation--such as restricted stock or RSUs--works very well from a tax point
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If you are not familiar, last December the Congress and the President made permanent one of the most significant tax breaks probably ever made available to founders and investors in startups. They created something that they could have rightfully called, "Tax Free Startup Company Stock." What am I