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ARTICLE · 22 JULY 2009

Income Trust Decision-Making Checklist - June, 2009

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Determining whether to convert to a corporation or pursue another alternative is complex. In assessing the merits and timing of such a decision, management and trustees of an income trust must consider a number of factors, particularly strategic, tax, financial, market and legal considerations.

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Alternatives for an Income Trust to Consider:

  • Conversion to a corporation now, later or not at all
  • Sale, merger, MBO or spin-out
  • Conversion to a U.S. master limited partnership
  • Restructuring to improve tax efficiency without conversion

Determining whether to convert to a corporation or pursue another alternative is complex. In assessing the merits and timing of such a decision, management and trustees of an income trust must consider a number of factors, particularly strategic, tax, financial, market and legal considerations. Here are some key questions to ask in making a decision as to the best alternative:

Strategic

  • What is the income trust's business strategy? Does it want to grow through acquisitions or organically?

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