Company Restructuring
Restructuring a Business
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 adn the future impact of any change of ownership arising from creating a group structure.
When you involve OmniPro early on, we can explain the various options and how these might play out from a company law, financial reporting and tax perspective
For more information and to discuss your client’s needs, email us or call us today on 053-9100000. We look forward to working with your practice.
How We Can Help With Your Company Restructuring
When approaching a restructuring or reorganisation project, the business owner and accountant often need guidance, as there are different types of structures and different mechanisms available, depending on the objectives. Share transfers, mergers, share-for-share exchanges, share for undertaking and golden shares are some of the commonly used terms to describe ways of re-organising a business.
OmniPro can advise on the optimum route for a company to best satisfy the needs of the business and the business owners. The key, as with any business transaction, is to get this advice early in the process. When we are involved from the outset, we can explain the various options and how these might play out from a company law, financial reporting and tax perspective.
Steps Involved in the Company Restructuring or Re-Organisation Process
Each re-structuring or re-organisation is different and will need separate consideration. Below are some of the options that can be used:
- Share-for-share exchange/share for undertaking exchange
- Golden share
- Share transfer
- Merger
- Bonus issue of shares
- Sub-division shares
- Summary approval procedure
- Members Voluntary Liquidation