Employment is open worldwide. Whether we talk about Australia or any other location, talents are hired on the basis of their skill rather than a location. Australia ranked 8th among the top 10 countries in the Global Startup Ecosystem Ranking. The growth of the startup is extravagant in Australia as they welcome talents globally. There are tons of companies in Australia that hire US residents. Welcoming US talent in their company called for IRC 409A Valuation.
409a valuation

Startups from Australia who are offering stocks to their US employees need to comply with 409A valuation. The rule is for every company type when the stock option is given to US residents. Grab a detailed idea about 409A Valuation in Australia by scrolling through this blog. By the end find a dedicated team for your Australian Company to complete 409A Valuation. 

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When does an Australian Company need a 409a Valuation?

Any company located in Australia employing US citizens will need a 409A Valuation in the following scenarios: 

  • Before the issue of the first or any common stock options.
  • After raising funding rounds. 
  • Every 12 months. 
  • After every material event takes place. 
  • While approaching any IPO, acquisition, or merger.
    409a valuation

Penalties for not complying

There are a set of penalties that a company and an option holder has to face if they do not comply with IRC Section 409A. The penalties are: 

  • Income Inclusion: Income will be included at the time of vesting even if it has not yet been paid to the employees. 
  • Tax Penalties: 20% Penalty tax to the employees on the deferred amounts. 
  • Interest Rate Penalty: Elevated Interest rate on the late payment of the income tax due on the compensation to the employee.
  • Reputation: The employer risks being sued by the employee and losing its reputation.

Sharp 409A for Valuation 

 Sharp 409A Valuation experts evaluate the businesses to generate a value that is fair and defensible. The team ensures your company is IRS-compliant.

A company irrespective of the location generally looks for the reputation and experience of the valuation provider and the industries they have worked for. Sharp 409A delivers valuation reports in just 2 days that strictly follow AICPA guidelines

To have a discussion with the Sharp 409A Valuation team, reach out today.

 

Topic: 409A Valuation