Back dating invoices
Since so many people think this is an important point, I thought I’d do a post addressing just that contention. What I assume people mean is that granting in-the-money options is not illegal, so long as you account for it properly. But the whole point of backdating is to pretend that you’re not granting in-the-money options when in fact you are.
And to say it’s up to the bean-counters to catch this situation is silly, because the whole reason you’re using phony dates is so that the bean-counters won’t know what you really did.
The document should be dated when it is actually signed, but it can refer to the historic effective date of the transaction.
The transaction should be ratified by minutes or resolutions of the participating entities.
Will you have the survival skills to master our quiz?
Whenever I write about backdating, many people write in to tell me that backdating’s not illegal; you just have to account for it correctly.
Indulge your adventurous spirit by exploring some associated ‘extreme’ vocabulary.
Although it may have been intended to put in place a new arrangement by a particular date – often a year end – that date may now have passed. Obviously the ideal position is to put in place the legal documents in advance. Well, it depends on what was transferred, and whether it can be said that the relevant transaction has already happened.
Documenting a transaction which has already happened One possible scenario is that the relevant transaction has already happened, but just hasn’t been documented yet.
This could involve putting in place a business transfer agreement now, which is dated when it is actually signed.
The agreement could specify, amongst other things, that costs and revenue would be apportioned by reference to the historic effective date, with adjusting payments being made accordingly.