To be their tax and payroll compliance obligations to the Federal Government (and sometimes state governments) and the maintenance of their corporate filings in every state in which they are organized or registered to do business. Periodic reporting under the SEC is only mandatory for public companies or (to a lesser extent) for private companies who register their securities with the SEC or become an Exchange Act Reporting Company after going public, etc.

The key unknown facts that will materially affect a given start-up’s financial reporting obligations include: type of entity (corporation vs. limited liability company vs. partnership), size of company (how many employees, how much revenue, what is the public float if the company is going to go public), stages of funding (i.e., was the funding done under Reg D, Reg A, or Reg CF, etc.), and where the company is going to conduct business (i.e., what states will the company be operating in – nexus) Entity type drives federal income tax return form and due dates, employee presence creates payroll deposits and quarterly and year-end payroll tax returns for the business, the method of fundraising drives any required SEC notice filings and may also create audit/reporting requirements, and operating in more than one state creates a need for additional tax registrations with state departments of revenue and additional filings with those state departments.

Federal reporting obligations for startups

Federal business income tax filing depends on the chosen tax classification:

1. C‑corporation: Form 1120 (due generally on the 15th day of the 4th month after year‑end; special rule for June‑30 fiscal year).
2. S‑corporation: Form 1120‑S (generally due the 15th day of the 3rd month after year‑end).
3. Partnership / LLC taxed as partnership: Form 1065 (generally due the 15th day of the 3rd month after year‑end).
4. Sole proprietor / single‑member LLC taxed as disregarded entity: Schedule C attached to Form 1040; due the 15th day of the 4th month after year‑end (April 15 for calendar‑year filers).

Payroll withholding, deposits, and payroll forms

All the payroll taxes that a startup must withhold from its employees, including both federal income and FICA taxes (Social Security and Medicare), must be deposited on either a monthly or semiweekly schedule, which is determined by the lookback rules. It is also possible for the startup to qualify for the next day deposit rule if it is a high-liability business.

The core federal payroll filings include:

– Form 941 (Quarterly Payroll Taxes): Due by the end of the month following the end of each quarter (April 30, July 31, October 31 and January 31). If all deposit payments are made on time, then there is an opportunity for a 10-day extension.

– Form 940 (Annual Payroll Tax – FUTA): Due by January 31 (or February 10th if all deposits have been made timely).

– W-2 / W-3 (Annual Wage Reporting): The Social Security Administration requires that W-2 forms must be filed electronically or in paper format by January 31 and that copies should also be provided to employees by the next business day after January 31 if that day falls on a weekend or holiday.

– Form 1099-NEC (Independent Contractors): All 1099-NEC’s must be filed with the IRS by January 31 (may be in either electronic format or paper format), and copies must be provided to each recipient.

SEC requirements for startups

When do private start-ups have to file with the SEC?

Many private start-ups do not have to file Form 10-K, Form 10-Q, or Form 8-K. However, many private start-ups have dealings with the SEC through exempt offerings, and in rare cases, involuntarily through mandatory Exchange Act registration.

The primary triggering event for Exchange Act registration is found under Exchange Act Section 12(g): According to the SEC, if an issuer (exception for certain banking entities) has total assets of over $10  million, that issuer must register any class of equity securities that exceeds 2,000 record holders, or that exceed 500 record holders which are not accredited.

Initial Public Offering (IPO) or registration and ongoing reporting requirements for publicly traded companies

When an issuer becomes subject to Exchange Act filing requirements, it will be required to file periodic reports (10-K,10-Q) under the Exchange Act and to certify to the CEO and CFO is also subject.

Filing deadlines by filer status (summary):

Regulation D and the Form D 15‑day rule

The Securities and Exchange Commission’s requirement for Form D Filing is to be filed up to 15 days from the date of the first sale when the first investor enters a binding contract. (Saturdays, Sundays, and Holidays are converted to the next business day when applying this rule).

The SEC has an added requirement for a Rule 506(b) Offering when there were non accredited Investors involved; therefore, under Reg D’s Rule 502(b), a Company must provide its investors with the required financial disclosure information established by the SEC.

Accounting standards: GAAP, tax accounting methods, and ASC 606

It is important for Startups to keep tax accounting separate from financial reporting to Investors and to the SEC. For Federal Tax purposes, the IRS has defined the Cash Method (recognizing income when received and expenses when paid) and the Accrual Method (recognizing income when earned and expenses when incurred).

The SEC continues to formally reaffirm that the Financial Accounting Standards Board is the designated private sector standard setter for U.S. Generally Accepted Accounting Principles (GAAP) for purposes of U.S. capital markets reporting.

The provisions of ASC 606 (Revenue from Contracts with Customers) establish a “core principle” and a “five-step model” for recognizing revenue in accordance with the transfer of promised goods and/or services to customers in an amount that reflects the expected consideration to be received for those goods/services (i.e., identify the contract, identify the performance obligations, determine the transaction price, allocate the transaction price to each distinct performance obligation and recognize revenue as each performance obligation is satisfied).

For many venture-scale Startups (and in particular, SaaS Startups), the practical implications of ASC 606 may include some or all of the following: documentation of performance obligations; Documentation of variable consideration; assessment of timing for point in time versus over time ; significant differences between revenue per ASC 606 and “billing/cash” and, therefore, KPI governance. Audit, assurance, and internal control thresholds

For public company audits, the Public Company Accounting Oversight Board requires registration of public accounting firms that prepare or issue audit reports for issuers (or play a substantial role).

SOX 404(b): the SEC explains that non‑accelerated filers are not required to provide an auditor attestation of management’s ICFR assessment, while accelerated filers generally are (and filer status depends on public float and, in some cases, revenue thresholds).

Exempt‑offering audit/review requirements (where applicable):

1. Regulation Crowdfunding (Reg CF): By tiering the required financial statements for Regulation Crowdfunding, the SEC guidance requires audited financial statements for raises greater than $107K and $500K, respectively, for Tier 4 and Tier 5 raises, respectively, as well as for issuers who are not first-time issuers.
2. Regulation A (Tier 2): As stated in the SEC guidance, audited financial statements must be included in offering circulars (in accordance with GAAS or PCAOB) by All Tier 2 Issuers and requires ongoing reporting (1-K/1-SA/1-U) depending on the deadline established for each offering.
3. Regulation D: With respect to non-accredited investor participation in an offering, the SEC guidance focuses on the delivery of the Form D and applicable disclosures made to the non-accredited investor when participating in an offering. The audit requirement is not a universal or statutory requirement for most non-accredited investors; however, some contracts entered with accredited investors may contain audit requirements based on due diligence and/or future public company plans.

State-level annual reports and franchise taxes

Operating checklist (calendar-year company)

Monthly Basis: Complete Bookkeeping for the Business, Prepare Payroll, and Make Required Payroll Tax Deposit(s) (Monthly/Semi-Weekly as Required).

Quarterly Basis: File Form 941 Within 10 Days After Month-end Following End of Each Quarter and Receive 10-Day Extension on Filing if Employer Deposit Is Made on Time.

Annually (January): Prepare/Form W-2/W-2 (Employee) for All Employees; prepare/Form 1099 Non-Employee Compensation for All Independent Contractors; File Form 940 Based on How Payroll Taxes Were Deposited.

Annually (March/April): Prepare/Submit the Entity’s Federal Partnership/Corporation Income Tax Return (1065/1120-S/1120) to Federal Government and Any State Equivalent; File State Annual Reports/Franchise Tax with Appropriate State(s).

Regarding Fundraising Events: File Form D With SEC Within 15 Days After First Sale of Securities If Using Regulation D or If Using Regulations Crowdfunding or Regulation A to Fundraise Must File Required Form Financial Statements (Audit/Review) Continuing Reporting Under SEC Rules.

FAQ

Do private startups file 10‑K/10‑Q?

Usually no-unless they become Exchange Act reporting companies (IPO/registration trigger) or hit Section 12(g) thresholds.

What is the Section 12(g) thresholds I should monitor?

>$10M assets and either 2,000 holders of record, or 500 non‑accredited holders of record.

When is Form D due for a Reg D round?

Within 15 days after the first sale (first irrevocable commitment).

What are the “hard” annual January deadlines?

W‑2 filing/furnishing is due January 31; 1099‑NEC filing and furnishing is due January 31.
When do audits become mandatory?

Public company audits must be performed by PCAOB‑registered firms; Reg A Tier 2 requires audited financial statements; Reg CF can require reviewed or audited statements depending on amounts raised.