The structure of your business may be influenced by many factors including:
- Type of trade or investment
- Where you trade or invest
- How you trade i.e. ecommerce or physical services
- Joint venture arrangements
- Number of business owners and/or investors
- Whether you are an importer/exporter
- Type of intellectual property
- Development requirements
- Your personal and family objectives
The structure for a lifestyle business may be different to one you are building to sell or maintain for future generations. We help start ups as well as mature businesses ensure their external structure and internal processes are correct to meet your objectives. For example:
- Where it is intended to sell a business corporate governance and internal processes need to be sufficiently robust to ensure a smooth due diligence process and limited warranties and indemnities.
- Where the intention is for family member to be involved, the structure of ownership may take various forms including shares with different rights or ownership through a trust.
- If raising investment, it might be important to consider return and risk and security level as well as agreements allowing arbitration and smooth exit in case the relationship doesn’t work.
We will guide you through the important issues, maintaining a commercial approach to build a long-lasting relationship you can rely upon.
Case Study 1: Film studio
We were approached by a solicitor whose client owned a film production company that had utilised its profits to acquire investment properties. The shareholder and director were considering retirement although wanted to keep the properties and sell the trade. The value of the properties and income generated resulted in the shares not qualifying for entrepreneurs relief. We advised and sought HMRC clearance on a demerger utilising provisions of the Insolvency Act permitting the properties to be held separately to the trade. It also meant that after the minimum ownership period, the shares qualified for relief on a future sale.
Case Study 2: Capital demerger
A firm of accountants introduced a trading business with two distinct operations. The owner considered that one operation could be sold relatively quickly whilst he wished to retain the other for an income stream. We provided advice on the alternatives to separate the operations and agreed to undertake a capital demerger. Clearance was sought from HMRC and the transactions undertaken working in conjunction with corporate solicitors. The operations were separated and one subsequently sold which qualified for entrepreneurs relief.
Case Study 3: Property developer
We were approached by a property developer who wished to relocate overseas. The property business had historically received finance from third parties although the shareholder had accumulated enough wealth to finance some projects himself. We advised and put in place a corporate structure for both the investing aspects and the trading elements taking into consideration the cross-jurisdictional tax position.