Corporate Simplification and Value Extraction Services
The simplification of a complex corporate structure or the extraction of value for shareholders is a highly technical area, requiring careful analysis and consideration of a whole range of legal and tax considerations.
The type of projects involved in this work can include:
- simplifying a group’s structure;
- improving a company’s balance sheet where there are negative reserves arising from trading losses, enabling dividends to be paid from future profits;
- freeing up and repaying funds tied up in share capital or eliminating excess share capital;
- restructuring and partitioning a group’s activities either for sale, retirement planning or more efficient trading;
- removing unwanted companies from the Company House Register by the most cost efficient way;
There are various procedures, which can be deployed to achieve the objectives agreed with the shareholders of a single or a group of companies, including:
Members Voluntary Liquidation (MVL)
A formal procedure under the Insolvency Act 1986 requiring the appointment of a licensed Insolvency Practitioner.
Benefits include the formal agreement of creditor claims. All payments to shareholders are treated as a realisation of the investment and not as dividend income, which may give tax savings and possibly attract Entrepreneurs’ Relief resulting in a tax rate of 10%.
A simplified procedure under the Companies Act 2006 enabling alteration of the capital structure of a company.
Benefits include the elimination of negative balance sheet reserves enabling dividends to be paid, or the buying back of shares, which otherwise would not be permitted.
HMRC Extra Statutory Concession C16
An allowance given by HMRC allowing payment from a company to the shareholders as if there had been a Liquidation.
Benefits include lower costs through avoiding a liquidation process. It is restricted to a maximum of £25,000 capital value.
The removal of a company from the Companies House Register through a direct application made by the directors.
Benefits include substantially lower costs than with a formal liquidation procedure.
Opus Restructuring has a specialist team led by partners Trevor Binyon and Jo Rolls, which is focussed on corporate restructuring and simplification projects. We are committed to providing pragmatic and solutions-based advice in a cost effective manner and dedicated to providing bespoke services to meet our clients’ requirements. We have worked for many major UK and foreign corporates in this area, including FTSE 100 and UK 500 groups.
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