Taking a structured approach: managing business restructures

Leave a comment   Published in: ,    on November 30, 2014   by Justin Ward

It’d be great if running a business was smooth sailing all the time. But the reality is that companies can encounter a variety of challenges. These could include tax disputes and employee litigation, getting access to sufficient working capital, and securing additional funds from lenders to take advantage of future opportunities.

These issues can impose strain on a business. They can cause physical strain, as they add to the stress levels of company directors and managers. They can also cause financial strain by diverting vital funds away from core activities.

Unfortunately, there’s no silver bullet to resolve a company’s challenges. Instead, company directors and their advisors may need to comprehensively examine their operations and devise a series of improvement strategies. As part of this process, stakeholders may need to consider the appropriateness of the company’s structure.

Reviewing corporate structures

Typically, owners only turn their attention to matters of corporate structure when they create their business or if a problem emerges. In our opinion, owners should conduct yearly health checks to ensure their corporate structures are appropriate.

For instance, some owners operate out of structures that seek to minimise tax. However, these structures can be expensive to run and offer limited asset protection. This could be a risky situation as most businesses will struggle to survive without their core assets.

In order to deal with this challenge – or those listed at the start – it might be time to review your structure. Depending on your situation, this could involve a high-level review, or a more in-depth tax and risk assessment.

The power of a business restructure

At Macleay Partners, we regularly help restructure companies. For example, we worked with an Australian mining services company, MCA Engineering, who faced a number of challenges including tax issues and an inability to access additional working capital.

By restructuring their operations, we enabled MCA to address its legacy issues and attract extra working capital. As a result, MCA has obtained $7 million in additional funding and had developed a robust platform for future growth.

You can find more details on our work with MCA here.

Macleay Partners would be delighted to offer you a free consultation to discuss your business’s current corporate structure. Please contact Director Justin Ward at justinward@macleaypartners.com or on 0420 305 345.


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