Most business owners are not too concerned about company restructuring at the start-up stage. They just want to get up and running and will, typically, form a single limited company, possibly after commencing as a sole trader or partnership. As activities expand and the needs of the business become more complex, this structure may no longer be sufficient or appropriate for the needs of the business.

Business owners may want to merge operations into a single company. Meanwhile, in other situations, for example, to resolve a business dispute, sell a portion of business or to manage risk, the activities of a company may need to be split into separate companies. Alternatively, a restructuring or re-organisation may be required to manage disclosure requirements.

Creating a group structure and re-organising the operations is often the right solution, but it is imperative that the correct steps are taken in advance so that the desired outcome is achieved.

In creating a group, the default for many has been the old reliable golden share. However, depending on the needs of the client, this may not be the best option. Factors that should be considered include the group requirements from a taxation perspective, the ability to transfer assets within the group, the ability to potentially pay dividends up to the holding company free of tax and close company surcharge and the future impact of any change of ownership arising from creating a group structure.