Comment by zzbzq

In my experience owning private stock, you basically own part of a pool. (Hopefully the exact same classes of shares as the board has or else it's a scam.) The board controls the pool, and whenever they do dividends or transfer ownership, each person's share is affected proportionally. You can petition the board to buy back your shares or transfer them to another shareholder but that's probably unusual for a rank-and-file employee.

The shares are valued by an accounting firm auditor of some type. This determines the basis value if you're paying taxes up-front. After that the tax situation should be the same as getting publicly traded options/shares, there's some choices in how you want to handle the taxes but generally you file a special tax form at the year of grant.