Who this affects
Employees and Investors
iOS & Android
Employees and Investors
iOS & Android
How it Works
Who This Affects
Why This is Awesome
Private companies can now report the complete list of all ISO dispositions and see exactly which dispositions qualify for tax incentives and which ones do not, along with Ordinary Income value and other information.
Under Capitalization > Reports, find the Disqualifying Disposition Report (ISO):
Select the reporting date range, acknowledge the report’s use of in-platform securities and transactions, and then export the report to Excel:
When the report finishes generating, it will be available in the Downloads menu:
The report shows info on Disposition Type, Ordinary Income, FMV and more. In order to be completely transparent, Excel formulas are used for Disposition Type, Ordinary income, First Qualifying Disposition Date, and Disqualifying Reason fields to show how they are calculated:
Private companies with tender offers or secondary ISO transactions captured in Carta.
Available now for all Private market customers (the Public market Disqualifying Disposition Report is available at request as part of the Early Access release).
For more information around the Disqualifying Disposition Report and underlying data, please refer to this support article.
Carta now supports integrations with 150+ HRIS and payroll providers. Customers that integrate their HRIS with Carta will have access to Pending Stakeholder Terminations, Pending Updates to Stakeholders, and Carta Total Compensation (with an active subscription).
Your organization can unlock a new level of automation that helps you become more efficient and make better-informed decisions about your equity program with Carta’s HRIS integration. More specifically, HR integrations will help your organization in the following three ways:
1. Quickly update employee records
Reduce double entry, win time back, and gain a single source of truth for critical employee information like terminations and employee addresses.
2. Keep employee data synced across systems
With HRIS and equity data synced, you can trust that your information is always ready to take action on. If there is ever a discrepancy, Carta will flag it and make it easy for you to reconcile.
3. Calculate and understand tax impact
Employees’ tax impact has never been easier to understand with salary, location, and equity information complete in one place. Carta can help inform employee tax liability for taxable equity events.
There are two steps that need to be taken to properly integrate your HR system:
1. Connect your HRIS
There are a few variations for connecting each HRIS system depending on the system’s API configuration. However, this should take no more than two minutes to complete for any provider. Here are specifics for each provider Carta integrates with:
Note: Only those with Company Editor, Company Administrator, or Legal Administrator permissions can perform the HRIS integration on Carta. Most HR systems also require the individual authenticating the integration to have the highest permission level too.
2. Match employee records from your HR/payroll system to stakeholder records on Carta
Carta will match the list of employees in your HRIS to the stakeholder ledger in Carta by looking at First Name, Last Name, and Email, then ask you to review them for accuracy. Please see here for how to perform the Employee ID matching process.
Note: This is a necessary step for you to take to be able to take advantage of integrations.
There are two specific modules that will allow your organization to make use of your HR system integration with Carta: Pending Terminations and Pending Updates to Stakeholders.
Please see below for how to use these modules to help you manage data coming from your HR system on Carta:
Starting in May 2022, we will require that all Carta accounts have two-factor authentication (2FA), also known as Multi-factor authentication (MFA) enabled. Investor Services customers should confirm all of their team members have personal accounts properly provisioned and secured with MFA/2FA as soon as possible.
MFA is the industry standard for software companies, like Carta, that store sensitive identity and financial information.
As we make this change, all accounts need to be associated with a single person’s name.
If there are multiple people at your organization accessing Carta with the same email and password, you need to take action.
If you’re not sure, click here for instructions on checking or updating the name on your account.
You can add people on the people page of each account by following these steps.
If you are unsure about how to set up access for other members of your team, please reach out to our support team at firstname.lastname@example.org.
We cannot send MFA/2FA codes to multiple people at once.
Our Investor Services support team is happy to help you with this process. Reach out to them directly at: email@example.com.
A password on its own gives you poor protection from hackers. They can steal them from other insecure websites or via malware, and people often reuse the same password for many accounts or choose passwords that hackers can easily guess. Carta is adding this additional security to protect your account from social engineering, phishing, and other related attacks.
Thank you for being a Carta customer, and we look forward to answering any questions you might have about this change.
Soon, companies will have access to the updated Capitalization > By Share Class view. This page comes with improved performance for large Cap Tables, allowing you to view and interact with your Cap Table up to 5x faster.
To access this view, you can navigate to Capitalization > By Share Class.
We will continue to improve the experience, adding a new summary visualization to the top of the page, and improving the navigability between the By Share Class and the By Stakeholder Cap Tables.
Support Article: Capitalization Table - By Share Class
Users with holdings in companies identified as Qualified Small Businesses (QSB) will now be notified of the potential tax benefit. Carta determines QSB eligibility when performing a 409A valuation and email notifications will be sent to all users associated with the company once the valuation is accepted. In addition, vesting emails will include information about the qualified small business stock (QSBS) tax benefit.
Furthermore, users can now find a banner in the company overview page within their portfolio that informs them about QSBS eligibility, linking to a blog post to learn more. Finally, users will be notified if their exercise qualifies for QSBS once they submit an exercise request.
US Companies using Carta for 409A valuations that are QSBS eligible and all their stakeholders, prioritizing “Vested” option holders.
Emails are sent to all users associated with a company that qualifies as a QSB. If Carta determines the company is a qualified small business, emails are sent once the 409A valuation is accepted. Extra emails are sent to all users each time the company’s valuation includes eligibility.
Vesting emails will now include information about QSBS eligibility to help make a more informed decision about exercising.
A banner informing users of the QSBS Eligibility Tax Benefit can be found next to the company’s name in their portfolio. This banner appears for companies identified as qualified small businesses, including information about the potential tax benefit from exercising and the expected timeframe of the company’s eligibility.
Upon submitting an exercise request, the Congratulations page will inform users that the shares are QSBS-eligible. It summarizes the conditions and links to an Equity Education article to learn more (highlighted in red).
Previously, our capital call request tool only allowed General Partners (GPs) to request capital from all investors in the fund regardless of their close date. Starting today, GPs can use the redesigned tool to:
Additionally, GPs will be able to view a list of all their newly closed investors, as well as any investors whose commitments have increased or decreased since the last capital call. The capital call amounts to be called from these investors will be auto-calculated by the tool for the GP to review.
How it works
Select the type of capital call you would like to request:
Who this affects
This is available for all fund administration customers who are on the Carta General Ledger.
We’ll be expanding the tool’s functionality to handle more complex scenarios, such as calling additional capital from both new and existing investors in the fund. We also plan to embed the PDF notices at the review step to give GPs the option to start the capital call without further approvals.
Soon, Carta customers will start seeing an expanded set of Roles to help you reflect the different individuals who are handling different aspects of Cap Table management.
For now, users assigned to new roles will serve as point of contact for their areas. Over time, these individuals will see updated experiences and be guided to relevant Carta tools.
To see this experience, Navigate to "Company > Permissions and Roles > Roles"
If Company tax data is not complete:
If Stakeholder tax details are not complete, update missing data under the Stakeholder details tab of the same Form 3922 page
5. If the missing data was entered in, return to the Compliance > Section 6039 page and click Generate to click through the steps to proceed and add company contact information. The company contact is formatted into the electronic Copy A .txt file that will be uploaded to the IRS site.
Click Generate Form 3922 to begin the generation of the files.
6. Refresh the page after some time if you see a spinning wheel or navigate away and return later.
7. Once generated, click Download reports for the tax year to download a .zip file to your local drive that contains all necessary data for Copy A (efile), and Copy B (statements).
The .zip file will be split out into the following three files:
For any filing questions, contact your tax advisor.
Public and Private Market companies with an ESPP.
This feature can be enabled on demand by reaching out to our support team or Customer Success Managers.
The product team will be enhancing Form 3921 functionality to bring it more in line with the new Section 6039 admin experience.