Restructuring a business is not an easy task, there are many complex legal hurdles to jump over before you can start to reach your organisation’s goals, which is why you need an experienced legal team on your side. Here is what you need to think about before you start a corporate restructure:
Obtain legal advice
Whether you are preparing your business for sale, merger or growth, legal advice is essential. This is because anomalies and errors in the documentation or process used can cause delays, lead to legal disputes, substantial added costs and may even lead to a potential sale collapsing.
Consult your business’ plans
This will enable the business to decide whether or not a restructure is appropriate and is being done at the right time. If growth into new markets is part of your plan or you are preparing your business for sale, it is wise to plan this out as soon as possible.
Restructures do not happen overnight, you will need to plan, consult, and implement the necessary changes. Negotiations with employees, shareholders and creditors can also take time, so ensure you have left yourself enough time to do what you need without rushing.
Obtain tax and financial advice
A restructure is normally driven by commercial reasons, such as a business sale, however, you may wish to include tax-efficiently in your restructure plans. We recommend that you consult your tax advisor on whether the restructure is tax efficient.
A business restructure generally, has a big effect on employees. You may need to consider changing your organisational structure to make your business more desirable to buyers or investors. It is likely you will need to consult your employees if there are going to be redundancies or changes to the terms and conditions of their contracts.
Review trading agreements
Often overlooked in restructures, reviewing trading agreements are essential to a successful business restructure.
If a restructure is being considered for the purpose of a sale, then you may need to reconsider the shareholder's agreement.
Our commercial solicitors are highly experienced when it comes to corporate restructures and are available to provide legal advice to management teams. Contact us on 0161 696 6229.