Reorganisations and restructurings
If you are looking to restructure your business then BBS Law is able to advise you on all aspects of inter-group reorganisations and demergers.
Inter-group reorganisations are carried out for the purpose of changing the structure of a group, or creating a group structure, and typically involve the transfer of companies, businesses or specific assets within a group.
There are a number of reasons why you might be looking to reorganise your business, including:
- Tax planning. Many reorganisations are carried out in order to implement tax planning strategies in conjunction with your tax advisers; for example, to rearrange cash flows within a group
- To prepare for the sale of a company or business; for example, a business division might be transferred to a new subsidiary to facilitate its sale, or assets used by a subsidiary that are held elsewhere in the group might be transferred to that subsidiary prior to its sale
- Following an acquisition, the business or company that has been acquired might be transferred to another group company, or property might be transferred to a property holding company within the group and leased back to the operating company
- To prepare for the acquisition of a company or business, to ensure that it is acquired into an appropriate part of the group
- To increase efficiencies, for example by simplifying a complex group structure by consolidating certain of its businesses and/or support functions and removing dormant subsidiaries
If your company or group is carrying on a number of different businesses, it can be beneficial to split these businesses into separate independent entities. This process is known as a demerger.
There are a number of ways of structuring a demerger but the final result is that the original businesses end up being held separately with each business generally being held by a company owned by one or more of the original shareholders in the demerged company.
There are various reasons why you might wish to implement a demerger including:
- Succession planning
- To divide up businesses following a shareholder dispute
- To divide the businesses of a jointly owned company or group, perhaps as an exit mechanism for a joint venture
- To separate businesses between different business sectors
- To free one business from the regulatory or financial constraints placed upon another business
Good planning is essential for any reorganisation or demerger. We encourage our clients to involve us early on in the process in order that we can ensure that all legal issues are identified at an early stage. We will ensure that these issues are properly addressed and that arrangements are properly documented and will stand up to scrutiny form, for example, a future purchaser, the tax authorities or a future liquidator.