Reorganising your business structure

News / / Reorganising your business structure

Given these extraordinary times when many businesses are in lock-down, companies may wish to take this time to look at their business structure and see whether it could be reorganised. This will hopefully put them in a good trading position when restrictions are lifted.

The main reasons for carrying out an intra-group reorganisation are:

  • to improve the administration or operation of the business or to drive cost efficiencies;
  • consolidating subsidiaries into fewer subsidiaries or providing for less formal structures; 
  • converting divisions or branch offices of a  group into formal subsidiaries with their own legal status and board of directors;
  • as a precursor to a sale to a third party e.g. where  a company wishes to sell part of a business, it may be necessary to undertake a reorganisation, so that the necessary assets are transferred into a separate subsidiary ready for purchase;
  • transferring specific assets to subsidiaries which have specific functions, e.g. subsidiaries which hold or manage intellectual property rights or real property;
  • a complete demerger or split of the corporate group;
  • improving tax efficiencies.

The restructuring will usually involve the transfer of share capital or assets between two or more companies in the same group.  Which method is used will depend on who will have responsibility for existing liabilities.  Generally speaking, under an asset purchase, the buying company will select the assets and liabilities it wishes to acquire from the selling company whilst under a share purchase, the buying company takes over ownership of the company carrying on the business and thereby assumes all of its assets, obligations and liabilities.

If you would like any advice on restructuring your business, or just an informal discussion regarding issues to consider prior to a reorganisation, please do not hesitate to call Theresa Grech on 07849 834082 or email her on

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