Surrey BC Corporate Reorganization Lawyer
WHAT IS CORPORATE REORGANIZATION?
Corporate reorganization and restructuring refers to the act of reorganizing the legal, ownership, operational, or other structures of a company. The reasons to reorganize a company may vary, which can include adding a holding company or family trust, eliminating one or more corporations or trusts in the corporate group, changing the share structure or ownership of one or more companies, doing an estate freeze, or a variety of other possibilities.
TYPES OF COMPANY REORGANIZATIONS
There are numerous ways companies reorganize and restructure. The reorganization of a company typically addresses the efficiency component in an attempt to increase profits.
Corporate reorganization normally occurs following buyouts, takeovers, other forms of new ownership or the threat or filing of bankruptcy. Some common types of corporate reorganization include transfer, recapitalization, and identity change.
Transfers typically involves bankruptcy by permitting the transfer of all or some of a failing company’s assets to a new corporation. In this case, the stock and securities of the controlled corporation are distributed to the previous company’s shareholders.
Another type of transfer is classified as acquisitive reorganizations or divisive restructurings, which include spinoffs and split-offs.
For instance, if Corporation A contains the assets of former Corporation B and of Corporation A, Corporation B goes out of business, and former Corporation B shareholders control Corporation A.
A recapitalization transaction usually involves the exchange of stocks and securities. It involves only one company and aims to restructure the company’s capital.
An identity change can be achieved by simply changing identity, form or place of the organization.
These changes may include name change; change of the province where the company operates or even changes in the company’s charter.
In such a case, a transfer is to occur from the prior corporation to the new company.
Potential benefits of doing a corporate reorganization include simplifying the corporate structure and thereby reduce annual accounting and legal costs. It can also reduce the overall tax burden in the corporate and family group, as well as allow for the application of business losses from one corporation to another.
PATROLA LAW CAN RESTRUCTURE YOUR COMPANY FOR MAXIMUM EFFICIENCY
Patrola Law Corporation is focused on delivering restructuring and business transformation solutions. Our Surrey BC team of professionals are committed to our client’s success and address the full spectrum of financial, operational and transactional risks and opportunities.
We provide expertise in corporate reorganization, tax restructuring, capital market advisory as well as financial management and performance improvement solutions.