Finally, C corporations can convert to S corporations but it can take a long time for the conversion to be complete (up to 11 years) and there are significant tax issues that need to be addressed (dealing with the C corp.’s “built-in gains” among others). Conversion alone won’t necessarily get you over the finish line.
Most importantly, this isn’t something you want to do on your own or with an inexperienced or unsophisticated professional. Retain someone who knows that they are doing. And do it now. Your exit will be here sooner than you realize.
Eric Pritchard co-chairs the electronic security group of Kleinbard Bell & Brecker LLP. Pritchard focuses his practice on the electronic security industry with an emphasis on acquisitions. This column does not constitute legal advice; please contact an attorney with specific questions.