Forming an Entity for Search and Acquisition?

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July 24, 2025

by a searcher from United States Military Academy in Boston, MA, USA

Are most people doing acquisitions through an LLC formed for that purpose? Any good or bad practices around entities for the acquisition? Does that LLC become owner during asset purchase?
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commentor profile
Reply by a searcher
from New York University in San Diego, CA, USA
Hey ^redacted‌- just echoing here that "Yes", you do want to launch a LLC for your search. Think of it as a start-up: business entity, business bank account, etc. This not only allows for an acquisition, but it allows you to seperate your search interests and expenses from your personal activities.
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Reply by a searcher
from Stanford University in Healdsburg, CA 95448, USA
LLCs are common because they're quick and flexible to form. An LLC can also hold QSB stock so if you progress towards an acquisition that would be QSB qualified you can form and acquisition C corp and issue stock to the original LLC to address that part of QSB compliance. Depending on your personal situation (and things like whether you're taking investment funds from third parties) you may want to look into other structures. Best practice is to check with a lawyer and/or accountant about your individual circumstances and get direct and personalized advice.
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