- Time for change? Restructuring your business to secure its future
Time for change? Restructuring your business to secure its future
Time for change? Restructuring your business to secure its future2nd June 2020 - Published by Kuits corporate team
The coronavirus pandemic has had a significant and ongoing impact on business operations across multiple sectors and its effects will continue to present challenges for some time to come.
The Government has introduced several measures intended to assist businesses facing financial difficulties and many business have taken advantage of the furlough scheme. However, when this scheme comes to end, many businesses may find that they are struggling to survive in the difficult economic climate.
Future-proofing your business
This breathing space may be the time to consider what steps could be taken to enable your business to continue to weather the COVID-19 storm and secure its long term future. This may involve focussing on the best performing areas of your business, or its valuable assets and seeking to protect these from underperforming of higher risk business areas.
What can be done?
This very much depends on the current structure of the business and the assets it owns, but examples would include separating valuable property or intellectual property assets from riskier trading parts of the business. If loans are affecting the company’s balance sheet, these could be capitalised which could assist if further funding is sought in the future. Perhaps if a business has multiple sites at different performance levels, there would be a benefit to splitting those into separate company ownership. If the value of your business has been negatively affected by the pandemic, now may be the ideal time to take these steps as lower values often mean that tax consequences of restructures can be mitigated.
Thinking ahead to the future and a possible sale of the business, this exercise can also assist with presenting it in the best way to potential buyers, especially if a sale might involve only part of the current business – having that part separately packaged will make it a more attractive proposition.
The legal bit
Detailed tax and legal advice is need to plan a restructure in the most advantageous way, both for business operations going forward and to avoid detrimental tax consequences. If you think your business could benefit from a reorganisation, Kuits can offer advice on all aspects of this, including the initial planning and the legal implementation.
For advice on the above, please contact corporate partner Jan Winstanley on 0161 838 7884 or email firstname.lastname@example.org.