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If you are in the process of awarding stock options to employees or service providers, do not forget that you need (among other things) board approval of all stock option grants. This is required by the corporate law of Delaware, Washington, and I imagine almost every state corporate law in
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The SEC staff has issued its first report on the definition of the term "accredited investor." Dodd-Frank requires the SEC to review and report on the definition of "accredited investor" every four years: to determine whether the definition should be modified or adjusted for the protection
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Now that the qualified small business stock 100% tax exclusion is going to be permanent, one question that will come up more often is: Qualified Small Business Stock Options Do optionees qualify? Meaning, do holders of compensatory stock options, who exercise those options and acquire stock--can they qualify for the
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In the big tax bill the Congress just passed, Congress made the 100% exclusion for gain on qualified small business stock held for more than five years permanent. You can find the text of the bill at Congress.gov. Qualified Small Business Stock You might remember that the Congress has
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You might be wondering about the status of the 100% tax exclusion for qualified small business stock acquired during certain periods and held for more than five years. Late last year, the Congress extended the 100% tax exclusion for qualified small business stock acquired: after the date of the enactment
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Deferred salary or deferring salaries is an alluring trap in startup land. A company's runway gets shorter. The company wants to extend its runway. It can be tempting for the founders to start "deferring" salary. Maybe some non-founder employees start deferring salary too. Deferred Salary: The
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If your company has had employees exercise incentive stock options ("ISOs"), you are required to report certain information to the IRS and the optionee about the exercise. ISO Tax Reporting There is no income or employment tax withholding required on the exercise of an ISO. But there is
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The RAISE Act would allow holders of stock in private companies to more easily sell their shares. Sales of private company stock are known as "secondary transactions." Secondary transactions are currently hard to do because of the securities law restrictions on sales of shares in private companies, and
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A lot of companies, including a large portion of Silicon Valley startups, grant new hires immediately exercisable ISOs (incentive stock options) with the expectation that many will exercise their options “early” for favorable tax treatment. In fact, employees are often given a kit with all the paperwork, including everything needed
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The SEC has finalized the Title III crowdfunding rules. Now it is time to see how people will use the new rules. One thing that I think might have been overlooked in all of the excitement over the final rules is the possibility of doing a Title III equity crowdfunding
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The final Title III Equity Crowdfunding rules contain a number of changes from the proposed rules. Some of the changes are good, and some are arguably not so good. On the good side: * First time issuers raising more than $500,000 and up to $1 million will not have to
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You might be wondering what I am talking about when I say that there is a 12(g) problem with equity crowdfunding. What is Section 12(g), anyway? Section 12(g) is a section of the Securities Exchange Act of 1934 that requires companies to start reporting as a public