All in the Family : Consolidated Reporting and Parent vs. Subsidiary Relationships

Transcription

1 All in the Family : Consolidated Reporting and Parent vs. Subsidiary Relationships

2 All in the Family : Consolidated Reporting and Parent vs. Subsidiary Relationships Speakers French Slaughter, Partner McGuireWoods LLP fslaughter@mcguirewoodsllp.com Dan Mayer, Partner UPCR LLC dan.mayer@upcr-llc.com

3 UPPO Presentation Disclaimer Use of the Unclaimed Property Professionals Organization, Inc., (UPPO) name of copyrighted materials in this presentation does not constitute an endorsement by UPPO of a member, vendor, product or service. The content represents the opinions of the author and not necessarily those of UPPO. This information is not intended as legal advice and should not be used to replace the advice of legal counsel.

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5 Today s Agenda Review Consolidated Reporting Discuss Requirements of Consolidated Reporting Relationship Between Parent/Subs Selection of Entity for Reporting Data Impact and Internal Organization Considerations

6 DEFINITION A consolidated report is one that is filed on behalf of more than one legal holder (e.g., a parent company that files one report for itself and a number of subsidiaries). NOTE: Michigan et al. policy is to not accept consolidated UP reports unless all filers have same FEIN.

7 REQUIRMENTS - Subsidiaries Each legal subsidiary must have: Established and current UP Policies & Procedures Designated UP coordinator Responsible Staff and Functional Area Designee

8 REQUIRMENTS - Subsidiaries UP Coordinator performs Data Management & Review Due diligence Process and Response Validation of Final Status Corporate UP Manager Coordinates Timelines, Due Dates, Deadlines Manages Data Requirements and Formats

9 REQUIRMENTS - Subsidiaries Corporate UP Manager (Continued) Provides Instruction and Compliance Procedures to Subs Manages and Collects Data from Subs Validates and Confirms Reportable Items

10 REQUIREMENTS - Corporate Corporate/Parent must also have current UP Procedures & Policies and designated UP Coordinator. Upon receipt of Subsidiary UP details, prepare state specific UP report and file as required.

11 RELATIONSHIPS Each Subsidiary has its own FEIN Sub UP Coordinator has UP reporting resources approved by Parent Parent should establish regular review of Subs P&P to ensure accuracy, timeliness and consistency

12 Consolidated Issues: Corporate Histories are Important The M&A history of the each of the filing entities will often be complex with various stock and asset deals that may have brought UCP liabilities into the filing.

13 Consolidated Issues: Corporate Histories are Important With legal entity simplification and post-merger integration, UCP liabilities can migrate around the group with no or little attention paid to UCP exposures. Important to identify where the exposures are and how they got there. Nothing in UCP goes poof.

14 Consolidated Issues: Special Purpose entities Related ( or third party) administrators of corporate functions. Giftco s, Proco s, Servco s ( Shared Services, e.g., Data Center, Billing & Collections), Financing Vehicles, Delaware Holding Companies for IP, etc.

15 Consolidated Issues: Special Purpose entities SPE s often set up for State Sales/Use & Income Tax benefits and clarity. States often see 2 Holders in Related Party and Third Party arrangements and choose their best target. Spelling out who has the duty to comply with UCP obligations helps.

16 Consolidated Issues: Choice of Entity C Corps and S Corps, LLC s including SMLLC ( SMLLC has same FEIN as owner), Partnerships- General and Limited, Master Limited Partnership (MLP s), REIT s ( and its related Lessee) Joint Ventures ( creatures of contract)

17 Consolidated Issues: Entity Formalities & Economic Substance Legal Entity formation documents. Deal Docs : Describe movement of cash and assets and the nature of that movement, e.g., capital contribution, mere reimbursement, fee for service with markup, payments to Owners Outside (or Inside) the Group, UCP duty. Accounting precision counts.

18 Questions?