Legal and commercial expertise for all types of business restructuring issues.
Our services are expert but our fees are highly competitive compared to larger law firms in London.
If you need experienced commercial and legal advice on the best way of restructuring or reorganising your business or group structure, our solicitors are highly experienced. We find the right solution at the right budget.
Whilst lawyers may not be the first professionals that spring to mind when thinking about restructuring, there will be legal issues and considerations, advice and paperwork needed.
As a commercial only law firm which advises many small and medium businesses we are experienced in the difficult decisions often involved with a business restructuring. Our services are expert but our fees are highly competitive compared to larger law firms in London.
There are numerous possible reasons for taking action to restructure a business. Common reasons include :-
- insolvency – downturn in business or concerns about business solvency;
- strategic corporate restructuring – deciding to ringfence assets or create a different company structure to mitigate risk such as a group company structure;
- tax considerations – you may be able to operate your business more tax efficiently;
- staff restructuring – employment related restructuring where you may decide to make some staff redundant or move to a more flexible business model;
- selling part of your business – a decision to sell only part of the business’ assets and not the entire business; or
- financial restructuring – taking the opportunity to refinance certain borrowings or seek private equity investment.
Specialist corporate restructuring lawyers
We are commonly instructed to advise and deal with :
- Debt restructure including debt for equity swaps.
- Capital reduction.
- Share buybacks
- Debt refinancing
- Restructuring structured and leveraged finance
- Company restructuring strategies (including company reorganisation, dilution of share capital, or de-mergers)
Choosing the best way to restructure
The approach taken will depend upon the key concerns and desired outcome. Much depends on whether the restructure is based on necessity and financial distress resulting in the need for business turnaround or whether the restructuring is designed to streamline, ring fence against risk or create efficiencies including tax efficiency.
Typical concerns will usually revolve around:
- Goodwill and branding – Who gets to keep the trading name and goodwill requires a decision as this is an asset which can be very valuable. A further point is trading history – some businesses need a solid history to deal with lenders and suppliers. In other cases the reorganisation is an opportunity to bury an undesired history.
- Continuity of business – existing contracts may be affected by a change of control . Consideration is needed as to whether any consents are required and if this could throw up issues.
- Assets and liabilities – the cash position of the company will affect the choice of route taken for the reorganisation. Another factor which plays a part is if there are assets such as property or investments as these impact on the tax position of the shareholders following the reorganisation.
Implementing a business restructuring
Often before a corporate restructure can happen the company must change its articles of association and get shareholder consents. We look at what needs doing for you.
We review and/or draft the reorganisation documentation and
- Deal with shareholder consents;
- Flag key risks;
- Warranties and indemnities – we help negotiate protections against liability for losses.
Tax on a business restructure process
Reorganisations can be very tax efficient, if carefully structured. Often, tax can be reduced to nil. HMRC will offer clearance before any transaction is implemented to confirm that tax charges will not arise in respect of the reorganisation.
We will secure HMRC clearance for you before implementing the reorganisation.
Tax risks on restructuring a company
If a restructure is not carefully structured the shareholders face risk as explained below. However, if the reorganisation is structured in accordance with the appropriate tax laws many restructures are implemented and neither the the shareholders nor the business face increased tax charges – known as tax neutrality.
- Income tax on shareholders on the value of the reorganised business;
- No corporation tax deduction;
- De-grouping charges on the company;
- Unwanted stamp duty land tax on the properties leaving a group of companies; and
- Loss of group relief.
Recent restructuring instructions and case studies
Find out more about how we’ve helped other businesses like you by reading :-
- Business restructure before sale
- Restructure where an EMI scheme was in place
- Restructuring as part of business succession plan
- Examples of share for share exchange restructures
For experienced, practical legal advice on restructuring your company or business or for assistance with the documents, legal or tax issues arising, please do get in contact.
Catherine is an extremely experienced solicitor, having been qualified since 2000, and deals with all types of corporate and commercial matters and advice and also tax law.
Catherine is well known for turning complex problems into solutions, priding herself on always finding a way. In her spare time she runs Gannons!