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The following is part of our annual publication Selected Issues for Boards of Directors in 2025. Explore all topics or download the PDF.

2025 begins with a continuation of the major tax trends emerging in the post‑Covid era: more aggressive audits by tax authorities in search of additional revenue, increased international cooperation between tax authorities, the end of transitional concessions to assist businesses through the pandemic, and a developing role for tax in shaping ESG policies and behaviors.Continue Reading The Current Tax Risk Environment and Best Practices for Managing It

2025 promises to be another turbulent year for boards of directors. On the heels of a historically unprecedented election, companies are still ramping up compliance with the ambitious agenda of the outgoing administration while simultaneously bracing for the changes promised by the next one. Against that backdrop, colleagues from across Cleary’s offices have zeroed-in on the impact of the issues that boards of directors and senior management of public companies have faced in the past year, as well as on what can be anticipated in the year to come.Continue Reading Selected Issues for Boards of Directors in 2025

In a May 31, 2024 opinion, the Delaware Court of Chancery denied a motion to dismiss a complaint challenging the sale of a public company with a controlling private equity sponsor to an unrelated, arms-length buyer, finding that the sale was potentially tainted by conflicts of interest.[1]  In particular, the court found that it was reasonably conceivable that the private equity sponsor’s receipt of an early termination payment under a tax receivable agreement put into place upon the target company’s initial public offering was a material non-ratable benefit, which may have led the sponsor to push for a sale (which would trigger the early termination payment), even if remaining a standalone company would have been better for the minority stockholders. The opinion also touches on important issues relating to financial advisors’ advice in connection with such a sale. While tax receivable agreements (“TRAs”) are common in sponsor-backed and “Up-C” IPOs, this case highlights a rarely considered issue involving these agreements, and the need for careful navigation of related potential conflicts of interest in a sale process where a private equity sponsor, and TRA beneficiary, continues to control the public company.Continue Reading Delaware Chancery Court Finds Private Equity Sponsor’s Tax Receivable Agreement Potentially Led to Conflicted Sale Process

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”

Impact of “Pillar Two” Global Minimum Taxation

The push for global tax reform will continue to have a significant impact on large multinational groups in 2024. Since broad international consensus was reached through the Organisation for Economic Co-operation and Development (OECD) in 2021 on the principles of a “two-pillar solution” to tax challenges arising from the digitalization of the world economy, many of the countries that support the plan (of which there are now over 140) have rushed through legislation to implement the second pillar (a global minimum rate of effective taxation) by the end of 2023. Many of the new “Pillar Two” rules will accordingly apply for the first time in 2024, and companies should be sure they understand both the overall global impact and how local nuances create differences between jurisdictions.Continue Reading Hot Tax Topics for Multinational Groups, in the US, the EU and Beyond

As 2024 gets off to a busy start, companies, boards and management teams are facing a host of new and developing business issues and a large array of regulatory developments, from new and growing risks and opportunities from the adoption of artificial intelligence, to ever-changing ESG issues and backlash, as well as enhanced focus on government enforcement and review. As has become a tradition, we have asked our colleagues from around our firm to boil down those issues in their fields that boards of directors and senior management of public companies will be facing in the coming year, yielding focused updates in eighteen topics that will surely feature at the top of board agendas throughout the year.Continue Reading Selected Issues for Boards of Directors in 2024

Earlier this month, the Treasury Department published its explanation of President Biden’s proposed fiscal 2024 budget. We have summarized the tax rate increases, as well as the executive compensation and employee benefits proposals below. These proposals, which are similar to the ones contained in President Biden’s last few budgets, are unlikely to be passed in their current form, especially now given that the House of Representatives is controlled by the GOP. However, we expect that there will be lots of negotiating over the fiscal 2024 budget, so one or more of these proposals may find their way into the final budget. We will publish updates as these proposals evolve.Continue Reading President Biden’s Fiscal 2024 Proposed Budget Includes Tax Rate Increases, and Several Executive Compensation and Employee Benefits Changes

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2023”.

In the United States, the Inflation Reduction Act of 2022 (IRA) was passed in August. 

The IRA will be of relevance to many U.S. taxpayers, with three particular areas of focus for…

In the current climate of market volatility prompted by the COVID-19 pandemic, more and more public companies with valuable US tax assets (e.g., net operating loss carryforwards) may, or at least should, consider adopting a shareholder rights plan in order to preserve those tax assets.  These plans are commonly referred to as “NOL rights plans” (or “NOL poison pills”).
Continue Reading Is Now a Good Time to Adopt an NOL Rights Plan?