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SEC Reporting

SEC Reporting

Under IRC 409A, privately owned companies are required to establish that stock options are not being issued below fair market value at the time granted—a potential tax liability for both the company and the employee. Companies either considering or currently issuing stock options or SARS should have an independent IRC 409A valuation—no less frequently than once every 12 months or more frequently if their Board believes there has been a positive change in the business which could result in a change in the implied market value of the security subject to the grant. (Typically this includes events such as new rounds of financing, achieving key milestones, or hitting certain financial targets.) Make sure your valuation is up-to-date prior to granting equity compensation awards.