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Many businesses get bigger over time, either organically or by acquisition, but the owners can be so busy growing the company that they sometimes lose sight of the longer term goals.  As a result we often find these larger businesses being operated by a single entity which owns all of the company’s assets and/or operates a number of distinct divisions.

This type of situation is not ideal for a company or its shareholders for a number of reasons including:

  • the valuable assets of the business maybe at unnecessary risk
  • separate divisions of the entity may operate more efficiently if separated
  • the owner may want to sell part of the business, rather than the whole.

By reorganising a company it’s possible to significantly reduce these risks.  A reorganisation could involve forming a new holding company, which would go on to own the key assets of the current trading company, leaving the trading company operating the trade.  It could also involve ‘demerging’ the current company and splitting separate divisions into different companies.

The significant tax implications of changing business structures need careful consideration. If you would like to explore the options available to you, please call Michael Burgess on 01782 279615 or drop him an email at michael.burgess@mittenclarke.co.uk