How to secure your financial advantages and the company’s future in a restructuring process
A restructuring of your business at the right time and place may be a great benefit and an advantage for you.
With the proper counselling, you will have a corporate structure supporting the company’s requirements, growth, and the best possible development. At the same time, HjulmandKaptain’s advice contributes to implementing the restructuring with due considerations for the possibilities and limitations in tax legislation to ensure that you achieve the largest possible financial gain from the restructuring.
We will guide you all the way, starting with identifying precisely what you wish to obtain.
HjulmandKaptain can assist you with the following:
- Formation of a holding company
- Changing an owner-managed company into a limited liability company, e.g. an “ApS” (private company) or an “A/S” (public company)
- Demerging, reorganizing, or merging your company for the purpose of dividing or consolidating enterprises
- Changing the corporate or owner structure
- Tax-free addition of assets – e.g. to a subsidiary
- Transfer of shares in the course of an exchange of shares
- Preparing a combination of all options
What does tax liability mean and why would you want to avoid it?
A restructuring is categorized as a sale. Generally, you will therefore be liable to pay tax immediately on the proceeds from the sale.
However, such tax payment may be avoided if you restructure your company; in that way, you will fully legally avoid a tax liability and instead be entitled to defer the tax liability to a later date – e.g. many years ahead. Until then, you may e.g. reinvest the tax advantage in the company.
If you make a mistake resulting in a tax liability, the amount will often be much higher than the expense of the legal advice.
Your advantages with HjulmandKaptain: The right corporate structure and financial gain
Experience and knowledge are required to ensure that you get from A to B as early, easily and financially best as a company owner in a restructuring process.
Indeed, there are many pitfalls to be avoided, as you need to know the tax rules for preventing your restructuring from resulting in a tax liability; at the same time, the restructuring must be completed in a commercially sensible way.
At HjulmandKaptain, we are specialists in restructuring, guiding numerous companies through the process to best effect every year with the largest possible gain and the greatest possible number of advantages. For you, this means that our procedure is both efficient and tailored, and we have an eye on the entire process. We also know all the available options, so you need not concentrate on the legislative part of the process.
Do you have an auditor already?
In that case, we would be pleased to cooperate with your auditor about the restructuring; in fact, we experience that such cooperation may be beneficial for you as the owner and for the restructured company.
The reason is that we know about the auditor’s practice areas as lawyers and can contribute and supplement the auditor concerned. Further, although your auditor may already be able to manage part of this area, HjulmandKaptain has as a law firm a different, more profound knowledge of the legal and civil part of the restructuring, including the drafting of transfer agreements, e.g. for the transfer of property, shares, or an entire company. At the same time, we are highly experienced in drafting corporate documents, e.g. in the course of mergers, demergers, share exchange, etc.
We can therefore manage part of the process which the auditor cannot.
What is the advantage of restructuring a company?
There may be many reasons for why a restructuring of your company is an advantage:
- Establishing the best operating structure for the company to ensure an optimum operation
- Preparing a succession planning with a proper division of e.g. business or values
- Sale of the business to avoid taxation of e.g. shares and assets
- Limitation of risk and liability to prevent you from becoming personally liable, yet better protected as the owner
- Making room for a new co-owner
With proper advice, you can therefore restructure your company without creating a tax liability, leaving you in the subsequent stage with consolidated finances and new benefits. Our clients often experience that the restructuring itself processes smoothly when we manage it for them, so they need not spend unnecessary time and resources.
How can you restructure your company?
A restructuring may be completed in many different ways, depending on your goal.
We often see that clients choose a holding company, which enables a tax-exempt exchange of shares from the company/companies owned by the holding company provided they comply with a number of legal requirements of ownership share, as an example. With a holding company you will further not be liable to tax on profits as long as you abstain from withdrawing profits from the holding company instead of e.g. re-investing them. Finally, you will be well protected in case of any loss or bankruptcy.
In a number of situations, you can also make a tax-exempt conversion of different corporate forms as long as it concerns limited liability companies. You may e.g. convert from a public limited company into a private limited company (or vice versa), and co-operative societies may be converted into limited liability companies.
HjulmandKaptain ensures that you get an optimum restructuring
Our lawyers are specialists in corporate restructuring, and we are used to the role as trusted advisers during the process.
We have profound knowledge of all the tax rules and the relevant legislation, so you need not study any of this thoroughly but merely tell us about the results you wish to achieve from your restructuring. What is the right structure and corporate form for you depends entirely on your goals and wishes for the future, your financial position, and your company.
Thus, we are ready to have an informal talk with you about your options so that we can together prepare the most optimum restructuring for you.
