The formation of joint ventures and the acquisition and sale of private companies organized as LLCs, partnerships and S-Corporations require careful tax planning. These types of entities are sometimes referred to as “pass-through” entities because their income is not taxed at the entity level. Instead, the owners pay tax on their distributive share of the entity’s income.
If you are currently an owner of or are seeking to acquire an interest in a joint venture or pass-through entity, you will want to maximize tax benefits and minimize tax costs. For example, in many private equity transactions, the owner of a private company simultaneously sells a majority of the company to a private equity buyer while retaining a substantial equity stake. In that case, the buyer can get a step-up in basis. And the seller may qualify for tax-free treatment on the rollover of the equity.
I have advised clients on the tax aspects of similar transactions ranging from debt workouts in the tens of billions of dollars to business acquisitions valued at less than $5 million. My experience includes structuring tax-efficient sales and acquisitions, as well as drafting and negotiating the tax aspects of purchase agreements, credit agreements, LLC agreements and partnership agreements. Here is a representative list of recent transactions:
- Represented private equity fund on its acquisition of a late stage startup software company serving the hospitality industry.
- Advised software and technology company in building materials industry on acquisition of strategic technology target, including preservation of Net Operating Losses, location of IP, and post-acquisition company restructuring.
- Tax counsel to private equity fund on its acquisition of majority interest in brake kit company (funded by both debt and equity) combined with tax-free rollover for historic owner.
- Represented U.S. controlling shareholder of Swiss pharmaceutical company treated as “Controlled Foreign Corporation” on complex sale, merger and rollover transaction with UK pharmaceutical company.
- Represented lender in a $30 million P&A film loan for a 2017 summer feature film.
- Counseled private equity fund on tax aspects of its acquisition of an international accounting, software, and back-office services group for the hedge fund industry.