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Example of backdating
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This type Example of backdating arrangement would not bind third parties, but it may be effective from an accounting and tax perspective depending on the length of time which has elapsed since the intended historic effective date. As from that date, customers may have been invoiced by the transferee, employees may have been paid by the transferee, and accounting entries may have been made to reflect the purchase price payable for the assets.
When is Backdating OK?
For example, a reduction of share capital using the UK solvency statement procedure only takes effect in law when it is actually registered with Companies House. But backdating options allows companies to set an exercise backdatiny that's lower than the current value of the company's stock. Those options give Jane the right, but not the obligation, to purchase 1, shares of Company XYZ stock at the market price on the date of the grant. For example, the selling and buying companies participating in a business transfer may agree between themselves to treat the transaction as if it happened at the previous year end.
So what is possible in this situation?