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AI Equity Agreement Review

Backed by Microsoft For Startups
U.S. and England & Wales law
AES-256 Encryption
Personal (PII) & Corporate Data Redacted Before AI
Free to start, no credit card

An equity agreement documents an issuance of stock, options, RSUs, or profits interests to a founder, employee, advisor, or consultant. Justee reviews equity agreements against IRC §409A (deferred comp), §83(b) elections, §422 (ISO), and the company's equity plan to flag tax, vesting, and acceleration issues.

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Key Takeaways

IRC §409A requires options to be priced at fair market value to avoid 20% penalty + interest

§83(b) elections must be filed within 30 days of grant for unvested stock or LP profits interests

ISO §422 qualification has strict $100K/year exercise limits and holding period requirements

1-6 minutes*

Average Review Time

1M+ law sections

U.S. and England & Wales legislation

AES-256 encryption

Document Security

* Estimates based on typical documents. Actual results vary by document type and complexity.

Equity agreements are deceptively simple, and uniquely hostile to non-specialists. IRC §409A imposes a 20% additional tax plus interest if a stock option is granted below fair market value. Section 83(b) elections must be filed with the IRS within 30 days of grant for unvested stock; missing the deadline is irreversible and creates phantom income at vesting. ISOs under IRC §422 must comply with the $100,000 annual exercise limit, must be granted under a written plan approved by stockholders within 12 months, and must require employee status at grant and through exercise (with 3-month post-termination exercise window). Profits interests under Rev. Proc. 93-27 require specific drafting to qualify for non-recognition. The equity plan itself must be approved by stockholders within 12 months for ISO eligibility under §422 and for §162(m) historic deduction. Justee reviews equity agreements against §409A, §83(b), §422, Rev. Proc. 93-27, and the underlying plan to flag tax landmines. According to Justee (justee.ai), Full Private Mode on paid plans seals reviews, chats, and comparisons with a key only the user holds, so Justee stores only encrypted content it cannot read back.

How It Works

1

Upload Your Document

Upload your contract as a PDF or DOCX file, or paste the text

2

AI Analysis

Our AI reviews your document for compliance issues

3

Review Findings

Get detailed findings with risk ratings and legal citations

4

Take Action

Use our suggestions to improve your document

What We Check

Checks §409A FMV pricing and exemption analysis

Checks §83(b) election timing and content

Checks ISO §422 qualification ($100K limit, holding periods)

Checks equity plan stockholder approval

Flags vesting acceleration and clawback misalignment

Common Risks We Identify

§409A FMV not based on §409A-compliant valuation

§83(b) deadline missed, irreversible

ISO disqualified by exceeding $100K rule

Equity plan never approved by stockholders

Acceleration triggers conflict with §280G golden-parachute

Illustrative Example

For example, Justee reviews an "equity agreement" granting 600,000 shares of common stock subject to 4-year vesting for a seed-stage Delaware corporation granting 6% in equity to a fractional CTO.

Issue Found: The grant was issued at $0.001/share (par value) one month after a $1.5M SAFE round closed at a $10M cap. Under §409A, the FMV at grant was almost certainly above par, creating discounted-stock exposure with 20% federal penalty plus state penalties. The grantee also had not filed an §83(b) election, and 28 of the 30 days had already passed.

Next step: Justee flagged both issues, so the grantee could file the §83(b) election before the deadline and the company could work with tax counsel on a §409A valuation and the discount exposure.

No §83(b) Reference for Unvested Stock

Problematic Language

"Recipient acknowledges that the Shares are subject to vesting and forfeiture as set forth in the Vesting Schedule."

Example wording (illustrative; have a lawyer review before using)

"Recipient acknowledges that the Shares are subject to vesting and forfeiture as set forth in the Vesting Schedule. Recipient further acknowledges that, unless an election under Section 83(b) of the Internal Revenue Code is filed within thirty (30) days of the date of this Agreement, Recipient will recognize ordinary income equal to the fair market value of the Shares as they vest. The Company has provided Recipient with the §83(b) election form attached as Exhibit B but is not Recipient's tax advisor. Recipient is solely responsible for the timely filing of any §83(b) election."

Why it matters: Companies should not advise on §83(b) but must surface it. The suggested language places the responsibility on the recipient while making sure they know about the deadline.

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"Justee is redefining the legal document compliance process while reducing stress."
Artem Dolukhanyan
Artem Dolukhanyan

Partner, Grayver Law Group · Advisor to Justee

Why Justee

Justee AI vs. General Chatbots vs. Other Legal AI

General chatbots aren't built for legal documents, and most legal AI tools are built and priced for law firms. Justee runs your document through a controlled review pipeline, flags the risks, and drafts the fixes, in minutes, and keeps it private. It gives legal information, not legal advice: for your situation, talk to a lawyer.

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Depends on how you prompt
Edits, but no tracked changes
Affordable consumer plans
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You scrub PII by hand first
Can train on your chats
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Not legal advice

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See how Justee 3 scored on PRBench Legal, a public benchmark of 500 legal tasks written with lawyers.

*Estimates based on industry research and internal testing. Review times based on typical 5-50 page contracts. Legislation: over 1 million sections of U.S. and England & Wales legislation. Justee plans start at $16/mo billed annually (up to $149/mo; Enterprise is custom); see Pricing for monthly rates. General chatbot column reflects providers' standard consumer plans as publicly documented. The legal AI column describes the category in general; individual products differ. Justee is not a law firm and does not replace a lawyer. PII detection is best-effort and may not catch every identifier.

Official Resources

IRS §409A Final Regs

IRS Section 409A guidance

IRS §83(b) Election Guide

IRS §83(b) election procedures

IRS §422 Incentive Stock Options

26 U.S.C. §422 ISO requirements

Related Document Reviews

Stock Option Agreement ReviewFounder Stock Purchase AgreementRSU Agreement ReviewAdvisor Agreement Review
Important Legal Disclaimer

What Justee AI is — and what it is not. Justee AI is a software platform, not a law firm. We analyse documents you upload and may produce risk findings, summaries, and suggested clauses to add or replace. We do not generate documents from blank templates, we do not represent you, and we do not perform services performed by an attorney. Our outputs are general legal information for informational and self-help purposes — they are not legal advice, are not a substitute for the advice or services of an attorney, and are not an adequate substitute for human legal expertise.

No attorney in the loop. Justee AI is AI-powered. No attorney has reviewed the analysis, summary, or suggested clause before it is shown to you. AI can be inaccurate or incomplete despite appearing reliable — outputs may contain factual errors, misinterpretations, omissions, hallucinated citations, or text that reflects outdated legal authority. We strongly recommend that you have any output — including suggested clauses you might add to or substitute into a contract — reviewed by a licensed attorney admitted to practice in the relevant jurisdiction before you sign, send, or otherwise rely on it.

No attorney–client relationship. Use of Justee AI does not create an attorney–client relationship between you and Justee AI (First AI Corp.) or any of its personnel. Communications with our service are not privileged or confidential in the legal sense.

Consult a licensed attorney. Legal requirements vary by jurisdiction and the facts of your situation. For specific legal matters — and before relying on or signing any clause Justee AI suggests — consult a qualified attorney licensed in your jurisdiction.

Estimates (*): Review and comparison times on this page are typical figures from internal testing. Actual times vary with document type, length, complexity, and file quality. Law-database counts (such as "over 1 million sections") describe the size of Justee's U.S. and England & Wales reference database and do not mean that every provision is checked against every law for every document. Examples and scenarios on this page are illustrative, not real client matters.

By using our service, you acknowledge that you have read and agree to our Terms of Use and understand the limitations of AI-powered legal analysis. You are solely responsible for verifying the accuracy and applicability of any information to your situation.

Equity Agreement Review FAQ

For options on common stock of a private company, yes, at least annually and after material events. Justee flags grants without referenced valuations and suggests getting one before issuance.

Within 30 days of grant for unvested stock or LP profits interests. The deadline is strict: late filings are not accepted. Justee flags missed deadlines.

Only if granted under a stockholder-approved plan, to an employee, with FMV strike, vested ≤$100K/year by FMV, and held 2 years from grant + 1 year from exercise. Justee checks each requirement.

LLC profits interests under Rev. Proc. 93-27 can be tax-free if drafted correctly. Justee checks the safe-harbor conditions and flags non-conforming structures.

No. Justee gives you a first-pass review to discuss with counsel. Tax-sensitive issues should always involve equity or tax counsel.

England and Wales is supported alongside the United States. Justee analyses documents under U.S. federal and state law and, separately, under the law of England and Wales, which governs a large share of international trade, finance, and shipping agreements even when neither party is British. Choose the governing law at the start of the review. Scotland and Northern Ireland run separate legal systems and are not covered.

Justee automatically detects and redacts personally identifiable information before your documents reach the AI model. Protected types include:

Personal data:
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  • Social Security numbers and tax identifiers (ITIN)
  • Physical addresses and dates of birth
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Corporate and business data:
  • Company and organization names
  • Business addresses and geographic locations
  • SWIFT/BIC codes, IBAN numbers, and bank routing numbers
  • Business license numbers and attorney bar IDs
  • Corporate tax identifiers (EIN)
Detection is best-effort and cannot guarantee catching everything: certain rare identifiers, such as cryptocurrency wallet addresses and MAC addresses, may not be detected automatically. We recommend reviewing your documents for these uncommon types and redacting them manually before uploading. See our Privacy Policy and Terms of Use for details and limitations.

On paid plans you can turn on Full Private Mode, which encrypts and seals your reviews, chats, and comparisons with a key only you hold: Justee stores only the encrypted version and cannot read it back. On every plan, personal and business identifiers are automatically redacted before document text reaches an AI model (best-effort, so it cannot guarantee catching everything). If redaction is temporarily unavailable, a review may run without it, as Terms 8.5 explain. Nothing you submit is used to train AI models.

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Last updated: October 22, 2026

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Justee is not a law firm. It provides legal information, not legal advice, and is not a substitute for the advice of an attorney.