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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
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The SEC has proposed changes to Rule 147. You can find the proposed amendments here. Rule 147 is one of the federal securities law rules that makes state-level equity crowdfunding more difficult. The reason? Rule 147 is the rule issued pursuant to Section 3(a)(11) of the Securities Act
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The SEC's Advisory Committee on Small and Emerging Companies recently issued recommendations regarding the regulation of finders. If you are not familiar with the rules, the SEC takes a very narrow view of who can help companies find investors without having to register as a broker-dealer. Broker-dealer registration
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If you are administering a private company stock option plan, you need to do what is referred to as "the Rule 701 math" before every grant of stock options or equity awards. What is "the Rule 701 math"? Rule 701 contains a set of mathematical limitations
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What is Rule 701? And if you are a startup or emerging company, why do you need to know about it? Rule 701 is a federal securities law exemption for issuing equity to employees, contractors and advisors. You need a securities law exemption or registration statement in place to issue
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Startups raising money need to know how to do so in compliance with federal and state securities laws. The trouble is--it is not always easy to know what the rules are. To make it more difficult, the rules keep changing. Congress passes new laws. The SEC issues new regulations. All
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Guest Post by Randy Ottinger Over 25 years ago my wife asked me to visit Seattle from Boston where we were living at the time. She is a native from Mercer Island, and most of her family is still living in the area. It was May, and the weather was