Is your business structure fit for purpose?

Restructuring your business

Why restructure?

Owners who regularly review and reset their business structure are best placed to adapt to changing circumstances and exploit new opportunities.

Restructuring refers to the process of reorganising the legal, ownership, operational, or other structures of a company to help make it more profitable, or better suited for its present or future needs.

Restructuring can help your business:

  • Achieve greater profitability
  • Harness efficiencies
  • Better manage risk
  • Reduce tax liabilities and help you realign your business and personal goals.

What are the benefits of restructuring?

Restructuring ensures that your assets and resources are performing to their best potential.

Restructuring enables you to streamline the ownership, operational, capital, tax and legal aspects of your company to support your long-term goals and personal wealth objectives.

What are the most common forms of restructuring?

Restructuring can take many forms and will depend on what you wish to achieve. Most commonly this includes:

  • Creating a group structure
  • Establishing a new holding company
  • Share reorganisation
  • Demerging or splitting a group structure.

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Examples of work

Restructuring for tax efficiency

Restructuring for tax efficiency

Utilising a Family Investment Company to make tax savings of upwards of £400K.

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Restructuring to protect your assets

Restructuring to protect your assets

Ring-fencing risk in your business.

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Restructuring to pass down the business tax efficiently

Restructuring to pass down the business tax efficiently

Saving circa £420k in potential IHT with minimal tax cost.

 

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Restructuring to fund retirement

Restructuring to fund retirement

How creating a group structure allowed for succession while funding retirement.

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Common reasons to restructure your business

Restructuring for fast growth

If you are running a fast growth business it is critical to pause and review the way your company is structured.

Rapid growth creates a need to review:

  • The way you are capitalised - to avoid the risk of overtrading

  • How your assets are held - for example do you need to hold property differently or create a holding company to protect stable parts of the business from riskier new ventures

  • Whether the time is right to issue or review employee share schemes

  • How you move profits around tax efficiently within a group

  • How you are remunerated - making sure you extract profits tax efficiently and exploit all the tax reliefs available to you

  • International expansion - making sure any subsidiaries sit in the right place within your structure.

Restructuring for exit

When thinking of the future of your business, and your possible retirement or succession, it’s essential to review all the working parts to put you in the best position both commercially and from a tax perspective.

How to identify areas that may need to be restructured:

  • Is your existing corporate structure over-complicated?
  • Do you need to undertake a demerger before sale?
  • Are all shareholders in agreement on your exit plan?
  • Are key employees secure or is it time to implement or revise existing share schemes?
  • Do you need to undertake any reorganisation of shares?
  • Do your contracts with customers and suppliers provide adequate protections and guarantees that make the business attractive to buyers?
  • Do you have a plan in place to manage your wealth across generations?
  • Are there areas of your business that are more profitable than others?

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