LLC, Partnership and Pass-Through Mergers, Part 1

As LLCs and other pass-through entities have become the default choices of entity in most business, commercial, and real estate transactions, many mergers or asset sales now involve two or more pass-through entities. The familiar principles that apply to corporate mergers or asset sales do not translate to pass-through transactions. Rather, combinations of LLCs, limited partnerships, partnerships, and even S corporations are governed by a nonintuitive jumble of rules that treat the transaction one way for business law purposes and quite another for tax purposes. Indeed, for income tax purposes, transactions following a variety of patterns are “deemed” to consist of a series of property contributions and distributions and taxed accordingly. Planning for both aspects is a very complex challenge. This program provides you with a practical guide to planning both the business law and tax law aspects of merging pass-through entities.

Schedule:

• Framework of nontax and tax law for combining pass-through entities, partnerships, LLCs, limited partnerships, and S corporations
• How transactions are treated for state law purposes vs. tax law purposes
• Tradeoffs between assets vs. membership interests/S corporation stock deals
• Nontax benefits of “entity” deals—contract assignments, licensing and registration transfers
• Successor liability issues in “asset” deals and how to mitigate risk
• Special considerations involving S corporation mergers—triggering hidden taxes, losing S corporation eligibility, structuring restrictions
• Benefits of treating stock transactions as asset sales under IRC 338(h)(10)