Why is involving our law firm required during onboarding?

As a registered transfer agent, we are required by the SEC to maintain accurate records and protect the interests of security holders. To perform our duties properly, we need your law firm to import and reconcile the data during the set up process to ensure that your cap table on Carta is correct when the onboarding is complete.   


When you sign up for Carta we send an invitation to your law firm to join. As the legal administrator, the law firm will be responsible for the "Cap table import", Cap table details, Documents, and Account Check sections of the set up guide. To see the set up guide view for law firms, click  here

While early law firm involvement appears expensive, the cost of late stage legal review and potential clean up could be even higher. An added benefit of having your law firm involved in onboarding is that they will likely be required to give a legal opinion on your company’s capitalization during any future financings. It is hard for law firms to do this if the details of prior stock certificates, option grants, and other securities have not been updated properly.

To quote Fred Wilson of Union Square Ventures: “Employee equity issues are tricky. You can and will make a bunch of expensive mistakes with employee equity unless you have the right counsel. There are plenty of law firms and lawyers who specialize in startups and you should have one of them at your side when you are setting up your company and throughout its life. That is true for a lot of reasons, but employee equity is one of the most important ones.” 

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