KPMG Executive View 
| September 2019

Up-C structure

KPMG explains that private business owners are using Up-C structures to unlock value beyond a traditional IPO. We describe a typical Up-C structure and highlight relevant accounting considerations and SEC filing requirements. 


  • 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.
  • This update provides additional accounting considerations when determining how a company should present the noncontrolling interest of shares of the flow-through entity retained by the original owners in its financial statements.


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

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