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Entity Reduction

Entity Reduction

Simplifying the group structure by eliminating redundant and surplus entities.

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Background

Group structures, particularly those which have been subject to multiple acquisitions, are frequently unnecessarily complex, include a plethora of non-trading entities and have complicated and inefficient intercompany debt arrangements. In addition, in the context of the introduction of the Companies (Accounting) Act 2017, many traditional accounts non-disclosure structures have become redundant and a more streamlined group structure is more appropriate.

Large and complex group structures lead to group inefficiencies as superfluous subsidiaries put pressure on resources both financially and operationally. Simplifying the group structure by eliminating redundant and surplus entities can:

  • promote a marketable group structure; 
  • free up resources to focus on business critical issues; 
  • reduce the risk of non-compliance with legal obligations; 
  • significantly reduce maintenance costs; 
  • eliminate corporate memory issues; and 
  • bring early resolution to contingent liabilities.

Download our PDF below to read about the different methods of dissolution.

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