Simplifying corporate structures

Group acquisitions can result in complex and burdensome business structures, with adverse impacts:

• Increased administrative burdens in day-to-day management, reducing the time available for value-added activities
• Inflated compliance costs (including audit, tax and Companies House returns)
• Increased risk caused by complexity
• Value trapped in group structures and dividend blocks caused by revaluation of inter-company balances or historic negative reserves
• Tax risks and costs associated with holding multiple inter-company balances
• Failure to resolve legacy issues
• Increased risk of management censure by regulators for failing to mitigate risk and act as effective caretakers

Complex corporate structures often persist because leaders lack the bandwidth to plan a revised structure and manage the simplification project through to completion. Risks around triggering tax liabilities and other tax, accounting and legal complexities involved in tidying up entities before their elimination also hamper simplification efforts. Businesses may lack in-house expertise; only licenced insolvency practitioners can complete solvent liquidations, for example.

S&W overcomes these barriers with a flexible, integrated corporate simplification service that delivers cost effective, lower-risk structures and returns capital in a tax-efficient way to realise value.

• Scope the project requirements (entities, phasing, target group structure and proposed timing) and build a project plan for each phase by workstream (such as contracts, inter-company balances, assets and security releases) and activity to ensure all areas are covered.
• Act as project manager, focusing on dependencies and grouping activities to minimise company staff time in delivery but reporting blockers and offering solution.
• Regular progress updates covering risks, issues and decisions, advising and supporting management with tax insights, and troubleshooting for blockers, bottlenecks, and decision points, as required.

• Project requirements review to identify and resolve tax issues around compliance, valuation and transfer of assets, clearing inter-company balances and making distributions
• Advising on optimal exit structures from a tax perspective
• Compliance support, obtaining HMRC clearances prior to rationalisation, preparing final tax returns, and overseeing de-registrations and removal of entities from group registrations
• Insolvency practitioner support to process solvent liquidations (members’ voluntary liquidations) and section 110 reconstruction schemes
• A full transactional service offering to cover any specific issues for your group

We have extensive experience providing corporate simplification and post-merger integration support within complex and regulated UK and multinational groups. We’ll help ensure the value enhancement behind the original acquisition rationale is achieved and that integrations are enduring and properly embedded.