Restructuring of Companies

The Challenge

At the time when a business starts, its founders typically lack a clear idea on how and to what extent it will develop so as to introduce the best possible business structure right from the outset.

A business may develop along different lines that eventually turn into separate business entities or it may accumulate substantial amount of assets that need to be protected against business operational risks.

Therefore it becomes necessary, at a certain point of time, to split separately running businesses or to spin off some assets for the purpose of their better protection or to establish a holding structure with a leading parent company providing the group management, marketing and administration of the businesses.

Each restructuring exercise implies legal reorganization in accordance with the Commerce Act. If it is not planned and implemented properly, the restructuring might lead to a substantial negative tax and financial effects that could otherwise be avoided.

Restructuring Options

Split-off This strategy is applied when several separately running businesses function with their assets and staff within the framework of a single business. The split-off is intended to prevent the risks for any of these businesses from turning into potential risks for the others. In this case, the staff and the assets (both movable and immovable) of the individual businesses are distributed into separate independent companies.

Spin-off It is used in the cases in which the business has accumulated substantial assets and it would be better, in view of better protecting them, to put them into another company that would lease the assets to the operational business which will always have its inherent business risks.

Merger/Acquisition This strategy is used to pool together businesses for the purpose of reducing the administrative and marketing costs and thus achieving higher efficiency.

Scope

• In-depth analysis of the existing situation;
• Proposal for the most suitable restructuring option in line with the good practices and the corporate objectives;
• Planning and implementation of all steps in the restructuring process, including the preparation of the required documentation and the registration in all relevant records.

Key Benefits

We have cohesive teams of business advisors, lawyers, auditors, tax and financial experts who can plan and implement every restructuring so as to prevent any negative tax or financial effects.