Corporate Restructure Specialist

There are times when a business needs restructuring. It may be due to changes in the market or trading conditions or bad debts. Whatever the cause the business needs a thorough overhaul to get it back to profitability and viability.

The Wikipedia definition of business or corporate restructuring is:

Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs.

This means a comprehensive review should be carried out of the current position of the business, its terms of trade, profitability and balance sheet.

Ownership
A company has several options when it comes to the legal structure of ownership. What is the business? A company limited by shares? A Limited Liability Partnership (LLP)? A partnership? A sole trader?

If the business is in a less than optimal structure the business can be transferred to another more suitable structure eg a sole trader to a company limited by shares. The business can also be transferred from one limited liability company to another with the appropriate safeguards and procedures.

Operational
Operations management is an important function for all organisations and should create the highest level of efficiency possible within the organization.  Business operations typically include the following key areas:

  • Location – Where you do business.  Physically and on-line.
  • Equipment – The tools required to get the job done.
  • Labour – The staffing side of the business. (Pro’s & cons of using sub-contractors)
  • Process – Quality control, improvement and the way you get the job done.
  • Terms of trade – Customers and suppliers payment terms need to be considered to ensure they are manageable within the cashflow constraints.
  • Prices & quotations – Are your quotes reviewed to ensure their accuracy and profitability?  It is vital this function is closely monitored on a timely basis.

By detailing what is required from your operations to achieve your overall business objectives, you will keep the business focused on the day to day events that are necessary to keep a successful business running.

Balance Sheet – Does your business owe more than it owns?
Do your business liabilities add up to more than your business assets? And if not, are you sure that your accounts provide an accurate picture of the business finances? Often, a solvent balance sheet includes items that have been overvalued, such as redundant stock and debts that can never be collected. If you deduct these items, does the balance sheet still look healthy?   If your business has insufficient assets to cover its liabilities, it is insolvent.   If you end up with a negative balance sheet the directors need to take advice to prevent them being personally liable.  Take the Insolvency Test

Cashflow
Is your business able to pay all liabilities as and when they fall due – including HMRC and pension contributions?  If not, maybe one of the operational matters are not optimised.  Poor cashflow can indicate overtrading or lack of profitability.  If your cashflow does not allow debts to be paid as they fall due, the business in insolvent, and the director’s can be held personally liable.

If you think your business could benefit from our corporate restructuring advice why not contact us to see how we can help.  We would be pleased to hear from you. Take the Insolvency Test

 

I think my business is insolvent – what should I do now?

With the help of a Licensed Insolvency Practitioner like Gibson Hewitt you do have options open to you.  However, the sooner you get help the better. We provide a one hour FREE confidential consultation meeting to discuss all your options so you can make an informed decision on what route is best suited to you and your business.

There are typically two formal business rescue services:

For more information please read our Frequently Asked Questions about Company Liquidation, Company Voluntary Arrangements, Insolvency and Business debts in general.

Gibson Hewitt are corporate restructuring specialists.  We recently won an award for being corporate restructuring advisors of 2016. This award was voted on by clients!

Gibson Hewitt Global Award Winners - 2016

Share this:Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone