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
What is an Up-C structure?
What should companies consider before using an Up-C?
Creating an Up-C structure
C corporation’s accounting
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