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Internal Restructurings Toolkit
Practical Law Toolkit w-022-8872 (Approx. 8 pages)
Internal Restructurings Toolkit
by Practical Law Corporate & Securities
| Maintained • USA (National/Federal) |
Core resources to assist in restructuring business entities within a US corporate group. For a comprehensive list of other available resources on this topic, visit the Corporations and Limited Liability Companies practice areas.
A US corporate group may reorganize its corporate structure to:
- Consolidate ownership of assets used in a particular business line in one entity or group of entities within the corporate group.
- Simplify the organizational structure.
- Eliminate dormant entities.
- Achieve US federal or state tax savings.
- Reduce operational costs.
- Take advantage of the more flexible management rules for LLCs (in the case of converting a corporation or partnership to an LLC).
Internal restructurings can be accomplished in several different ways, including:
- Cross-chain sale of the stock or other equity interests of a subsidiary.
- Converting a corporation or partnership to an LLC.
- Converting a partnership or LLC to a corporation.
- Dissolution or merger of a subsidiary.
- Sideways merger of a subsidiary into a sister entity.
- Downstream merger of a parent company into a subsidiary.
- Internal distribution of a subsidiary's stock or other equity interests followed by a contribution of the subsidiary's stock or equity interests to a sister chain of business entities.
- Contribution of directly held stock or other equity interests of a subsidiary by the parent company to a sister chain of business entities.
This Internal Restructurings Toolkit provides several continuously maintained resources to assist counsel in restructuring business entities within a corporate group. For a more comprehensive collection of Practical Law resources, visit the Corporations and Limited Liability Companies practice areas.