S-CORP (RE)STRUCTURING QUESTION
Hey all - Working on getting the right structure on an acquisition with the below considerations:
- They changed from C-Corp to S-Corp within the last 5 years (making immediate conversion back hard)
- I have preferred equity investors (which is not made simple in an S-Corp, without classes of owners)
- I am buying using an LLC (which you cannot have a multi-member LLC buy an S-Corp)
My current best plan is to place my preferreds onto the company cap table, and manage preference in a separate agreement. Later, once I can effect the C-Corp transition, I can roll them onto a preferred share class.
Has anyone dealt with this? Would love advice on this topic, if there's a known best practice.