Why look at restructuring your business?

Why look at restructuring your business?

There are many reasons why a business owner may look to restructure their business.

Whether you’re undergoing dramatic growth, shifting your strategy, or responding to new industry regulations or market conditions, there are numerous factors that can impact your business and necessitate a new approach.

A business restructure can help review operational and financial processes; provide clarity for succession planning, help existing financial difficulties and make the business run more effectively, both in the short and long term.

Restructuring your business can be the best way to make sure you are operating in the most efficient way for sustained future success.

Tom Haywood, associate in the company commercial team at Wake Smith Solicitors, looks at the process.

This article covers:

• What is a business restructure?
• Why consider a business restructure?
• When to consider a business restructure?
• What would a business restructure look at?
• How long does it take?
• Your next move?

What is a business restructure?

A business restructure aims to modify and reshape a company’s internal processes and operations. It can involve structural reorganisation involving reviews of processes, products, services and employees, as well as ownership, constitutional and management changes. It is extremely important that any business restructure is carried out with the support of both your legal and tax advisors and that appropriate tax clearances are sought and implemented.

Why consider a business restructure?

A business restructure should be considered when looking to:

• Limit liability
• Reduce debt and repay creditors
• Increase efficiency, and improve the business going forward
• Move money in a tax efficient way
• Assist with succession planning and transfer to a relative
• Reduce company costs
• Help to rearrange employee roles within the company
• Reposition a business in the marketplace
• Improve competitiveness
• Prepare for sale/buyout/merge

When to consider a business restructure?

A business restructure offers help to:

• Revive a flagging business
• Increase a company’s value
• Set a company up for a change of ownership
• Position a company for prolonged growth
• Assist businesses to re-adjust to changing trading conditions

What would a business restructure look at?

• Areas of the current business that need restructuring – contracts, staff, property
• What needs to be streamlined?
• What areas are failing?
• What can be scaled down, modified or stopped?
• What is profitable or not?
• What can be moved from the trading company to another off-shoot company?

How long does it take?

The timeframe of a successful restructure depends on many different factors. Planning and assessment is key throughout the process is key as owners should consider the changes and the impact on the short and long term of the business and ensure that sufficient time is allowed to obtain appropriate tax clearances.

Your next move?

Wake Smith can guide you with a successful restructuring plan. For further information, please contact Tom Haywood at Wake Smith Solicitors on 0114 224 2033 or email tom.haywood@wake-smith.com

Find out more about our Company Commercial services

Published 10/10/2024