If you’re considering corporate restructuring, perhaps because your business is in distress and you’re trying to avoid insolvency, you’ll need the legal assistance of a solicitor.
For an underperforming business, corporate restructuring is sometimes the key to keeping the company alive. But there are all kinds of legalities to consider before you can take action, and a solicitor will need to make sure everything is legally sound. Not to mention checking that you aren’t infringing on things like employment and corporate law.
No matter the size of your business, if you are in financial difficulty and struggling to find a way forward, speak to First4lawyers about corporate restructuring. We will be happy to discuss your circumstances on a no-obligation basis and help you to establish the best steps to take for your business.
What is corporate restructuring?
Corporate restructuring is the process whereby financial and legal experts help reorganise a company at a legal, operational, or ownership level, in order for that company to remain viable.
This process is usually undertaken to turn around the fortunes of an ailing business that has been underperforming and can no longer afford to continue without drastic change. Other scenarios that might lead to restructuring activity include:
- A change of ownership.
- A merger or acquisition.
- A demerger.
- Repositioning of the company.
The focus of restructuring will differ according to the needs of the company. If the situation is one of distress, and the company is losing money fast, then the focus may be upon reducing the tension between the company’s debt and its equity holders in order to reduce financial losses and move towards a recovery.
If a company is struggling to pay its debts, financial advisers may be called in to restructure the way in which debts are repaid, to ensure creditors are satisfied. This might involve the creation of a new schedule of debt repayment, or the negotiation of alternative forms of repayment for certain creditors, such as equity in the company in lieu of repayment.
The corporate restructuring process generally involves:
- An initial investigation into the company’s finances to establish whether there is sufficient liquidity for restructuring to take place.
- The creation of new forecasts that predict working capital more accurately.
- Negotiation with key creditors.
- The creation of revised business plans and agreements with creditors.
My company is underperforming – what should I do?
Over time, businesses that achieve success early in their existence can grow in size and complexity, and it is easy for inefficiencies to creep in. If your business is not in distress but you are seeking to reduce costs and improve efficiency, you may benefit from a form of restructuring known as corporate streamlining.
This process can help to make cost-saving improvements to your business in various ways, such as:
- Disassociation with historic entities that no longer serve a purpose for your business.
- Increasing the efficiency of departments that handle corporate governance and statutory obligations.
- Making cost savings by reducing the amount of time spent on auditing, accounting and compliance.
Solicitors with experience in corporate restructuring, such as those First4lawers can provide, can be brought in to simplify the way your company operates and ensure that every element of your business is not hindered by unnecessary obstructions.
I may need help with corporate restructuring – what should I do?
The sooner you contact First4lawyers, the better placed our corporate restructuring specialists will be to assess your business and start to work towards your recovery.
Whether your business is in distress and requiring an urgent restructuring to retain viability, or if you are simply looking to streamline your business so that it becomes more efficient and more profitable, our team of corporate finance has the expertise to help with the legal side of revitalising your company.
Contact us to discuss the situation facing your business. No matter your circumstances, we will work hard to help you.