A consolidation vehicle can make a transaction in which your comapny is being acquired simpler.

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How does it work?

Prior to acquisition you would have all non-major holders of the target company be consolidated into a single entity.

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What about document signature?

It depends on the configuration of your consolidation vehicle. Some companies configure their Consolidation Vehicle with proxy / power of attorney over certain decisions. Conact us to learn more. Regardless, all stakeholders that are being consolidated will need to complete a sign up process with certain KYC information.

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Does this change the tax status for investors?

No, the process of using a consolidation vehicle does not involve a transfer of stock into a partnership, so QSBS eligiblity may not be impacted.
We are unable to provide tax advice. This is not a recommendation or advice

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How do investors receive proceeds.

  • For stock proceeds of a private company, the single entity for the consolidation vehicle holds the stock.
  • For stock process of a public company, the single entity for the consolidation vehicle holds the stock and disburses it out to investors in-kind through a transfer or provides investors with the option to sell.
  • For cash proceeds, the single entity for the consolidation vehicle receives the proceeds and manages the disbursement to the investors’ accounts.
  • For escrow proceeds, the signle entity will receive payments as they are collected.