Corporate group structuring is often an attractive way for organisations to acutely position themselves to drive greater levels of financial growth.
For example, the creation of a subsidiary company, which acts as a separate legal entity allows for diversification within the group and can provide a vehicle for holding companies to enter into acquisitions or joint ventures.
Group structuring can also provide tax and debt structuring benefits to the overall corporate group. In particular, utilisation of finance subsidiaries within a corporate structure will help to mitigate the risk of the parent company for subsidiary debts and can also act as a tax shield when subsidiary loans fail.
Why Review Your Corporate Structure?
A review and overhaul of a group structure can bring many benefits, including cost savings, reduced management time and improved efficiency.
This may be undertaken following planned changes such as a refinancing, in connection with tax-driven changes, as part of a corporate governance initiative or following Mergers & Acquisitions.
It is essential that directors are aware of the legal and business risks inherent in corporate group structures. Additionally, corporate groups must be structured to reflect the group’s needs and should implement appropriate governance procedures that delineate responsibilities and authority.
At Roberts Nathan, we assist clients in reviewing their corporate group structure and highlighting any existing threats or opportunities.
Please do not hesitate to contact us to discuss planning for your corporate group structure.