At Transaction Capital LLC, we provide comprehensive, audit-ready 409A valuation reports tailored for private companies. Our IRS Section 409A valuations are essential for accurately determining the Fair Market Value (FMV) of your company’s common stock, ensuring that your equity compensation is compliant with IRS regulations.
A 409A valuation offers an independent assessment of your company’s FMV, which is crucial for avoiding potential tax penalties for both your company and your employees. By ensuring compliance with IRS regulations, our valuations protect you from costly repercussions and provide peace of mind when issuing stock options and other equity incentives.
Our team of experienced professionals conducts detailed analyses of your business’s financial history, projections, and comparable transactions to deliver precise valuations that withstand scrutiny. With over 1500 successful engagements, we focus on delivering valuations that not only meet compliance requirements but also serve as reliable documentation for audits.
Trust Transaction Capital LLC to provide you with an audit-ready 409A valuation report that safeguards your interests and ensures adherence to IRS guidelines, allowing you to confidently offer equity compensation to your employees.
409A Valuation FAQ
If your company plans to offer stock options or other equity incentives to employees, a 409A valuation is necessary to comply with IRS regulations. It helps avoid penalties associated with undervalued stock options and ensures proper tax treatment for both the company and its employees.
Funding prices are based on preferred shares with special rights and often overvalue common stock. A 409A valuation reflects the fair market value from a common shareholder’s perspective, making stock options more attractive for employees.
While it is possible for companies to estimate their fair market value internally, it is highly recommended to engage an independent third-party valuation firm. This provides safe harbor protections and audit support in case of IRS inquiries.
Non-compliance with IRS rules can lead to penalties and immediate tax obligations for employees. Furthermore, lacking a 409A valuation can deter investors or delay mergers and acquisitions.
Key information required includes:
- Company financial statements
- Capitalization table (cap table)
- Company Profile
- Captable, if any
- Fundraising history
- Desired valuation date
- Financial projection, if any
- Other relevant data impacting the company’s value
Key information required includes:
- Company financial statements
- Capitalization table (cap table)
- Company Profile
- Captable, if any
- Fundraising history
- Desired valuation date
- Financial projection, if any
- Other relevant data impacting the company’s value
Automated tools often lack accuracy, overvaluing common stock and risking audit rejection. A proper 409A valuation requires a deep analysis of your business and market, which goes beyond just cap table data.
A 409A valuation is valid for 12 months or until a significant event, like a new funding round, which could impact your company’s valuation.
We provide compliant, accurate, and audit-ready 409A valuations at competitive rates, backed by experienced analysts with top industry credentials. Our detailed reports meet AICPA standards, providing peace of mind for audits and financial planning.
Non-compliance with 409A can result in severe penalties, including:
- Immediate taxation of deferred compensation
- A 20% excise tax on the amount deferred
- Additional state-level penalties and taxes
Our team consists of experienced valuation analysts who hold certifications such as ABV, ASA, MRICS and CVA. They have extensive experience working with companies across various sectors to ensure accurate and compliant valuations.
To initiate the process, simply contact us through our website, email or call our office. We will guide you through the necessary steps and gather the required information for your valuation.