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Business restructuring refers to the reorganisation of a company structure, often to make the business more profitable or to simply become better organised. There may come a time when a business may need to revisit its corporate structure, often during difficult operating times. However, restructuring can also be undertaken by a business simply looking to increase its profits and reduce tax liabilities.
If you think your business has outgrown its existing company structure, or it’s struggling during the coronavirus pandemic, then it might be time to consider your restructuring options in order to improve efficiency and prevent your business from failing.
The different types of business restructuring
There are four types of business restructuring your firm might want to consider:
Demerging and splitting a group structure – As a firm grows, objectives may no longer align or shareholder differences may be unresolvable. In this case, it is often better for companies to operate separately.
Consolidating businesses into a group structure – In some cases, businesses that operate separately may work more effectively together. Consolidating, and therefore simplifying, the group structure could be beneficial.
Establishing a new holding company – A new holding company will allow your firm to own shares or assets in subsidiaries where the holding company can manage and control them.
Share reorganisation – The reorganisation of shares could include capital reductions, alterations of rights or the purchasing of shears. This could be beneficial for firms looking to attract new investment.
The advantages of restructuring
Whatever industry you are in, and whatever your reasons for considering a business restructure, there are many benefits to doing so…. Read More
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