KPMG Executive View 
  |   February 2018

Up-C structure


  • Company that is considering an IPO

Relevant dates

  • Effective immediately

Key impacts

  • An Up-C structure enables owners of a flow-through entity to conduct an IPO via a newly formed C corporation, which ultimately holds only an equity interest in the flow-through entity
  • The flow-through nature of the entity allows the C corporation to receive a step-up of the partnership assets’ tax bases, which creates future cash-tax savings. The owners typically retain 85% of these savings through a tax receivable agreement, and the new public investors benefit from the remaining 15%
  • By retaining economic interests in the pass-through entity, the owners also retain the benefits of single-level taxation

Report contents

  • What is an Up-C structure?
  • What should companies consider before using an Up-C?
  • Creating an Up-C structure
  • Tax-receivable agreement
  • C corporation’s accounting
  • SEC requirements