What happens if I need to restructure my business? - Palmers Solicitors

What happens if I need to restructure my business?

What happens if I need to restructure my business?

Going into business can be unpredictable – and there are a number of reasons you might want to restructure or reorganise your business at some point during its life cycle.

Depending on whether you are looking to scale back your business, avoid the risk of insolvency, or accommodate for the fact that directors are exiting the business, there are a number of challenges you are likely to face.

Regardless of the circumstances, however, you need to ensure that you have a clear purpose in mind before starting a restructure. This is because the whole process can mean a lot of upheaval for directors, shareholders, staff, suppliers and everyone else involved. This is why you need to be 100 per cent sure that a restructure is in the business’ best interests.

Looking to downsize?

If downsizing is your main objective when restructuring your business, you will need to systematically remove specific services from your organisation. This requires thinking very carefully about the impact this will have on the following:

  • Members of staff.
  • Cash flow.
  • Future capacity.

Communication is key – everyone involved needs to know, at the right time, what is happening to the business and how they will be affected.

It is also wise to seek specialist business law advice to reduce the likelihood of any contractual disputes or Employment Tribunal claims arising later down the line.

Need to relocate?

If relocation is required, you need to ask yourself the following questions:

  • Are you legally able to require your employees to relocate?
  • If not, how will you retain key members of staff?
  • Will you need to make redundancies?

Taking advice at an early stage will help you to plan ahead and achieve your goals amicably, with minimal disruption to your business’ day-to-day operations.

Management reshuffle?

If you are planning a management reshuffle, you will face very different challenges. Under these circumstances, you will need to assess each of your directors’ or managers’ duties, how these will continue and how they might need to change or be incorporated into new roles.

You may need to re-draft contracts, shareholders agreements, partnership agreements and other vital documents.

Whatever the circumstances, the challenges faced will vary, which is why it is important to seek specialist advice from the very outset.

For help and advice on company restructuring, please get in touch with us.