Description
A company “flip” has become a ubiquitous method of accessing the U.S. markets, whether for fundraising or commercial growth. A “flip” involves formation of a corporation in the United States, typically a Delaware corporation taxed under subchapter C of the Internal Revenue Code (a “Delaware C corp”), and transacting with your home country company, rendering it a subsidiary of Delaware C corp, with the goal of attracting U.S. investors and customers.
Delaware is most often the best choice for new startups, whether the business is born in the United States or elsewhere. Forming a Delaware C corp offers many benefits, such as access to venture capital and other private financing markets, as well as a step along the path to one of the world's premier stock exchanges, with access to deep and diversified pools of capital and future liquidity. Delaware also offers a more standardized and comprehensive body of law, allowing for legal and compliance predictability. Investors, private equity firms, and venture capitalists typically prefer (if not always prefer) for the company they invest in and conduct business with to have its domicile in Delaware. When a non-US based company grabs the attention of a US based investor, it is frequently asked to do a "flip” into Delaware in order to facilitate investment into the entity.
Read More here.
Discussion
By posting you agree to the Terms and Privacy Policy.