Company reorganisations are increasingly popular to save compliance costs. David Brookes discusses some of the issues and pitfalls surrounding reorganisations and hive ups
A group reorganisation following an acquisition is a popular step to reduce compliance costs and to align the group structure with the commercial reporting of the business. To prepare for entity elimination it is common to hive up across or down (for the purposes of this article the phrase ‘hive up’ can relate to all three scenarios) the trade and assets into other group companies.
However before a hive up there are many considerations that need to be taken into account. See Example 1 (on page 20).
Depending on the exact circumstances of the group there are a number of advantages and disadvantages to consider with a hive up.
Advantages
reduction in compliance costs;
simplified group structure;
poor performing divisions can be masked from creditors;
...
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Company reorganisations are increasingly popular to save compliance costs. David Brookes discusses some of the issues and pitfalls surrounding reorganisations and hive ups
A group reorganisation following an acquisition is a popular step to reduce compliance costs and to align the group structure with the commercial reporting of the business. To prepare for entity elimination it is common to hive up across or down (for the purposes of this article the phrase ‘hive up’ can relate to all three scenarios) the trade and assets into other group companies.
However before a hive up there are many considerations that need to be taken into account. See Example 1 (on page 20).
Depending on the exact circumstances of the group there are a number of advantages and disadvantages to consider with a hive up.
Advantages
reduction in compliance costs;
simplified group structure;
poor performing divisions can be masked from creditors;
...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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