Section 409A Valuation
The IRS has changed the rules governing deferred compensation. Newly promulgated Internal Revenue Code Section (IRC) 409A sets more stringent guidelines for private companies when issuing stock options and other forms of non-qualified deferred compensation.
Mirus can answer your 409A questions.
Mirus is the perfect resource for companies seeking assistance in meeting the new standards set forth in IRC Section 409A. We have built a storehouse of expertise over nearly 20 years of middle-market M&A transaction and valuation mandates.
What makes 409A valuations different from other valuations? Most valuations begin and end with an estimate of the value of the total enterprise and its equity; however a 409A valuation focuses on valuing the common stock of the company. As a consequence a 409A valuation needs to incorporate the financial features of a company’s capital structure to allocate the value of the equity among different classes of shareholders, as shown in the diagram above.
Noncompliance with IRC 409A can lead to acceleration of taxable income, penalty taxes, company withholding tax issues and potential exposure for board members. Additionally, non-compliance could impact the marketability of a business to investors and/or acquirers. Use these resources to learn about IRC 409A: