In the second edition of 'Getting the Deal Through' Q&A comparative series, we look at the key points which should be considered when thinking about corporate reorganisation, taken from our US, Belgium and Luxembourg chapters. You can read a PDF of the full chapters for the US, Belgium and Luxembourg here.
- New opportunities through reorganising your business – Businesses need to regularly review their corporate structure to provide for the most effective means to achieve current and future commercial plans while ensuring appropriate tax efficiency. Structural and business flexibility is necessary to remain competitive and improve efficiency, operational synergies, cost savings and enhanced shareholder value in a fluid, fast paced global market. A corporate reorganisation helps you achieve these goals, whether it has been triggered by a legal and regulatory change in your jurisdiction or following an acquisition. There are a number of reasons why a company may find it beneficial to restructure.
- Planning is key – Drawing up a plan to ensure all major stakeholders, both internal and external are involved in the reorganisation from the start, is key to ensuring a smooth corporate reorganisation. You should consider, legal, financial , regulatory and social impacts of the reorganisation and seek guidance before embarking on a reorganisation, no matter where the company is located.
- Evaluate employment – A reorganization can trigger a range of employee-related issues, including assessing employee talent and retention, contract related obligations and restrictions imposed under employment conditions. It is important to remember that if the reorganisation may result in a collective dismissal procedures must be adhered to, in order to mitigate any negative consequences and should always result in a social plan. Keeping employees or employee collective groups informed throughout the process is crucial.
- Seek consent – Ensure that the reorganization has all the necessary regulatory approval from both external and internal stakeholders. It is important to evaluate the impact of the proposed reorganisation on each entity involved and ensure that the impact on any prior agreements is considered.
- Always ensure post-reorganisation steps are considered and adhered to where applicable – It may be necessary to undertake a number of post-reorganisation steps, depending on the type of transaction and jurisdiction. It is important to ensure that you are aware of the different reorganisation steps which may apply and that these are agreed and reviewed prior to reorganisation.
Read the full chapters for the US, Belgium and Luxembourg, written by our international Corporate Reorganisations group for further tips and guidance.