F Reorganization Intake

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Product Router(Required)

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Matter Type(Required)

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Matter ID

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Matter Name

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EP Token

F Reorganization

The purpose of this intake interview is to gather the necessary information to structure and implement an F reorganization in preparation for the sale of a Subchapter S corporation. This process involves a series of interrelated legal and tax steps that will reorganize the selling entity into a holding company structure, allowing the buyer to acquire the business in a tax-efficient manner.

See Using an F Reorganization to Prepare a Subchapter S Corporation for Sale

Qualified Subsidiary

The qualified subchapter S subsidiary is the historical operating company that is being sold. It is the target of the acquisition. It is already formed and operating before the F reorganization process begins.

Business Name(Required)

State of Formation(Required)

Select the U.S. state that applies.

Type of Business Entity

Select the type of business or organization, such as Corporation or Limited Liability Company.

Formation Date

Month

Day

Year

Address

Street Address Address Line 2 City State ZIP Code

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qsub_domestication_state_tf

Yes

the QSub's Capital Structure

This section gathers information about the QSub equity, including whether there are multiple classes of stock, how voting rights are structured, and whether any stock certificates have been issued. Since subchapter S corporations are limited to a single class of stock for tax purposes, any variations should only involve differences in voting rights.

Do the subsidiary's governing documents create multiple classes of equity that give select owners different voting rights?

Yes

Is the subsidiary's equity represented by certificates?

Yes

Include stock power for transferring certificates?

Yes

List the name of the person or firm designated to transfer the certificates on the subsidiary's records

How do the subsidiary's documents describe its equity?

Number of Units

Percentage Interest

Fractional Interest

How is the subsidiary managed?(Required)

Member-Managed

Manager-Managed

the QSub's Ownership Structure

This section gathers information on the number of owners of the QSub.

Select the business's ownership structure

The business has only one owner

The business has multiple owners with equal interests

The business has multiple owners with unequal interests

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entity_owners_embed_scenario

Entity Owners

Entity Managers

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entity_owners_count

the QSub's Shareholders

This section collects information about the shareholders of the QSub. Identifying each shareholder ensures compliance with subchapter S requirements and helps structure the reorganization properly.

Shareholders

Name	Actions

Use the Add Shareholder button below to add shareholders.

Maximum number of shareholders reached.

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entity_managers_embed_scenario

Entity Owners

Entity Managers

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entity_managers_count

the QSub's Directors

This section gathers information about the QSub‘s directors. Understanding the board composition helps assess governance structure and ensures proper documentation for the reorganization.

Directors

Name	Actions

Use the Add Director button below to add directors.

Maximum number of directors reached.

Holding Company

This section collects details about the newly formed holding company, which will be structured as a corporation. Information such as the company’s name, date of formation, and other key details will help ensure proper documentation and alignment with the reorganization plan.

Business Name(Required)

State of Formation(Required)

Select the U.S. state that applies.

Type of Business Entity

Select the type of business or organization, such as Corporation or Limited Liability Company.

Formation Date

Month

Day

Year

Address

Same as subsidiary

Street Address Address Line 2 City State ZIP Code

the Holding Company's Capital Structure

To comply with IRS requirements for an F reorganization, the holding company’s equity structure must match that of the qualified subchapter S subsidiary.

Will the new business entity issue certificates to each owner representing that owner's equity?

Yes

Describe equity in terms of:

Number of Units

Percentage Interest

Fractional Interest

How will the new business entity managed?(Required)

Member-Managed

Manager-Managed

Closing

This section allows you to specify the date, place, and time of closing. Providing these details ensures proper coordination and documentation of the transaction.

Closing Date

Month

Day

Year

Time

Hours

Minutes

AM/PM

Time Zone

Specify closing location?

Answer Yes to specify an address where the closing will take place.

Yes

Closing Address

Street Address Address Line 2 City State ZIP Code

Conversion

This section addresses the conversion of the QSub into a single-member LLC. It analyzes the options available under state law, including statutory conversion, cross-entity merger, or revocation of the S election, and provides recommendations on the most efficient method for completing the conversion.

Do you want to proceed with a post-reorganization conversion of the qualified subchapter S subsidiary into a single-member LLC?

Converting the qualified subchapter S subsidiary into a single-member LLC after the F reorganization can help facilitate the sale by ensuring the transaction is treated as an asset sale for tax purposes. This conversion is typically not a taxable event and can be completed through a statutory conversion, cross-entity merger, or S election revocation, depending on state law. If you choose not to proceed with the conversion, the entity will remain a corporation under state law.

Yes

Converting a QSub Corporation to a Single-Member LLC Using Statutory Conversion

Since the qualified subchapter S subsidiary (QSub) is a corporation under state law and allows statutory conversions, the most efficient way to convert it into a single-member LLC is through ‘s statutory conversion procedure.

Steps for Conversion:

Determine State Law Requirements
- Verify that the state permits statutory conversion from a corporation to an LLC.
- Review state-specific filing requirements and any required approvals from shareholders or directors.
Prepare and File the Required State Documents
- File a Certificate of Conversion (or equivalent document) with the appropriate state agency.
- File the Articles of Organization (or equivalent document) for the newly converted LLC.
- Pay any required state filing fees.
Ensure the Holding Company’s QSub Election Remains in Effect
- The holding company must already have filed Form 8869, Qualified Subchapter S Subsidiary Election, designating the operating company as a QSub.
- Once the statutory conversion is complete, the QSub will continue to be a disregarded entity for tax purposes, now as an LLC.

Required Tax Forms:

No federal tax filings required for the conversion itself, as it is a non-taxable event.
Form 8832 is not required since the entity classification remains a disregarded entity.

By using a statutory conversion, the entity transitions from a corporation to an LLC efficiently while maintaining its status as a disregarded entity for tax purposes. This process avoids the complexity of mergers and simplifies administrative requirements.

Converting a QSub Corporation to a Single-Member LLC Using a Cross-Entity Merger

If the qualified subchapter S subsidiary (QSub) is a corporation under state law and the state does not permit statutory conversions, the most efficient way to convert it into a single-member LLC is through a cross-entity merger.

Steps for Conversion:

Form a New Single-Member LLC
- The holding company (parent entity) forms a new LLC in the same state where the QSub is incorporated.
- The new LLC is structured as a single-member LLC, with the holding company as its sole owner.
Approve and Execute a Merger Agreement
- Draft and execute a merger agreement between the QSub (corporation) and the newly formed LLC.
- Obtain approval from the QSub’s board of directors and shareholders as required by state law.
File the Necessary State Merger Documents
- Submit a Certificate of Merger (or equivalent state document) to the appropriate state agency.
- Ensure that the filing reflects the surviving entity as the new single-member LLC.
Ensure the Holding Company’s QSub Election Remains in Effect
- The holding company must already have filed Form 8869, Qualified Subchapter S Subsidiary Election, designating the QSub as a disregarded entity.
- Once the merger is completed, the QSub ceases to exist as a corporation, and the new LLC is treated as a disregarded entity for tax purposes.

Required Tax Forms:

No federal tax filings required for the merger itself, as it is a non-taxable event.
Form 8832 is not required since the entity classification remains a disregarded entity.

By using a cross-entity merger, the QSub transitions from a corporation to a single-member LLC in a state that does not allow statutory conversions. This process ensures compliance with state law while maintaining tax efficiency.

Converting a QSub LLC to a Single-Member LLC

If the qualified subchapter S subsidiary (QSub) is already organized as an LLC or PLLC under state law and has made a subchapter S election for tax purposes, the simplest way to convert it into a single-member LLC is to revoke the S election without making any entity classification changes at the state level.

Steps for Conversion:

Revoke the Subchapter S Election
- File a written statement with the IRS requesting revocation of the S election.
- The statement should include:
  - The corporation’s name, EIN, and address.
  - A declaration that the corporation is revoking its S election under IRC §1362(d)(1).
  - The desired effective date of the revocation.
  - The signature of an authorized corporate officer.
- The revocation is submitted to the IRS Service Center where the corporation files its tax returns.
Ensure the Holding Company’s QSub Election Remains in Effect
- The holding company must already have filed Form 8869, Qualified Subchapter S Subsidiary Election, designating the operating company as a QSub.
- Once the S election revocation takes effect, the QSub will become a disregarded entity for federal tax purposes while remaining an LLC or PLLC under state law.

Required Tax Forms:

Form 1120-S, U.S. Income Tax Return for an S Corporation (for the short tax year ending on the revocation date).
Written revocation request to terminate the S election.
No Form 8832 required since the entity classification does not change—only the tax treatment shifts from an S corporation to a disregarded entity.

By following this process, the entity transitions from an S corporation to a disregarded entity (single-member LLC) without a taxable event, preserving liability protections while aligning the structure for an asset sale.

Agreement Details and Authorized Signers

This section gathers details about the agreements involved in the transaction and identifies the authorized signers.

Agreement Title

Signatory for the subsidiary

Enter the full name of the primary person who will sign documents on behalf of the organization.

Position with the subsidiary

Enter the signatory’s position with the company.

Signatory for the holding company

Enter the full name of the primary person who will sign documents on behalf of the organization.

Position with the holding company

Enter the signatory’s position with the company.

Document Assembly

Select the general documents to assemble:

Fix formatting errors?

Our software will look for items like improper capitalization and attempt to correct them. If you would like to turn this feature off, select No. It is usually best to leave the answer as Yes.

Yes

File Format

PDF files do not require word processing software like Microsoft Word, making them easier to view across different devices. The disadvantage of PDF files is that they are difficult to edit after assembly. In contrast, Microsoft Word files can be opened and edited in Microsoft Word or compatible software, allowing changes to be made to the document after it is created.

PDF (.pdf) files

Microsoft Word (.docx) files

Delivery Method

Choose the delivery method. Select all that apply.

Browser

delivery_email

admin_email

qsub_owner_multiple_tf

Yes

qsub_manager_multiple_tf

Yes

entity_owner_multiple_tf

Yes

entity_manager_multiple_tf

Yes

entity_manager_title

entity_manager_title_single

entity_manager_title_plural

entity_manager_title_possessive

entity_manager_title_single_possessive

entity_manager_title_plural_possessive

entity_owner_title

entity_owner_title_single

entity_owner_title_plural

entity_owner_title_possessive

entity_owner_title_single_possessive

entity_owner_title_plural_possessive

entity_equity_title

entity_equity_title_single

entity_equity_title_plural

post_reorg_conversion_type

conversion

merger

revocation

entity_equity_units_tf

Yes

qsub_equity_units_tf

Yes

entity_manager_managed_tf

Yes

qsub_manager_managed_tf

Yes

qsub_manager_title

qsub_manager_title_single

qsub_manager_title_plural

qsub_manager_title_possessive

qsub_manager_title_single_possessive

qsub_manager_title_plural_possessive

qsub_owner_title

qsub_owner_title_single

qsub_owner_title_plural

qsub_owner_title_possessive

qsub_owner_title_single_possessive

qsub_owner_title_plural_possessive

qsub_equity_title

qsub_equity_title_single

qsub_equity_title_plural