Business restructuring

If you need experienced commercial and legal advice on the best way to restructure or reorganise your business or group structure, our lawyers have extensive experience in this area. We help you find the right solution for your business and budget.

Whilst lawyers may not be the first professionals that spring to mind when thinking about restructuring, there will often be legal issues and considerations, advice and documentation needed.

As a commercial firm which advises many small and medium-sized businesses, we are experienced in the difficult decisions often involved with a business restructuring.

We are commonly instructed to advise and deal with :

• Debt restructuring, including debt for equity swaps.
• Capital reduction.
• Share buybacks
• Debt refinancing
• Restructuring of structured and leveraged finance
• Company restructuring strategies, including company reorganisation, dilution of share capital and de-mergers.

Reasons to restructure

There are numerous possible reasons for taking action to restructure a business.  Common reasons include :-

• insolvency – a 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 in a more tax-efficient way;;
• 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.

Choosing and implementing 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 the business, ringfence assets, mitigate risk or create efficiencies, including tax.

Often before a corporate restructure can happen the company must change its articles of association and obtain shareholder consents.  We review the existing structure and advise on what needs to be done.

We review and/or draft the reorganisation documentation and

• Deal with shareholder consents;
• Flag key risks;
• Advise on warranties and indemnities and help negotiate appropriate protections against liability for losses;
• Advise on and deal with the tax aspects of reorganisations, to help achieve the most tax-efficient outcome. Where the relevant conditions are met, certain reorganisations may be structured so that there is no immediate tax charge. HMRC clearance may be available before a transaction is implemented to obtain confirmation of HMRC's view on the proposed tax treatment.

For experienced, practical legal advice on restructuring or reorganising your company or business, or for assistance with the documentation and legal or tax issues arising, please do get in contact.