• Why Businesses Need Restructuring

    Business agility relies on organisations being able to adapt quickly and shift the balance and focus of resources as needed. For businesses to remain efficient and continue to evolve with changing market conditions, restructuring may become a necessity.

    If your organisation is planning a change, it’s vital for you to consider the implications on your workforce, as well as financial and reputational risks to be considered and managed carefully. Beyond this, a reorganisation programme that affects people’s lives and livelihoods requires sensitive and informal handling.

    365 Employment Law advises businesses on the employment aspects of business restructuring. We have expertise in managing the consultation process, TUPE, and collective redundancies and we give practical, consultative advice to managers and HR teams in relation to:

    For advice and support with restructuring your business, get in touch with our knowledgeable and friendly team of employment law experts for an informal conversation about your business needs.

  • How to Choose the Best Way to Restructure

    When deciding on the best way to restructure your company, consider your current business situation and the business’ key problems. From here, set clear objectives and match this up with the solution that is best able to achieve them.

    Mergers and Acquisitions

    For businesses looking to increase their profitability, consider incorporating an existing company into yours by either buying a business outright, merging with an existing business and absorbing its assets, or something in between.

    Mergers and acquisitions are an excellent way to rapidly increase your revenue, production capacity, and market reach without the need to build a new company.

    Divestment and Spinoffs

    If you are looking to consolidate, sell, or close your business, divestment may be a good option if you are no longer profitable or are no longer fulfilling a strategic purpose.

    On the other hand, a spinoff can help you to reduce your involvement in a business unit without you needing to step away completely, especially if you are looking to achieve a high valuation on part of your business. Instead of you stepping away entirely, the unit will be restructured into its own standalone company and you will still maintain a portion of ownership.

    Cost Reduction

    For businesses whose running costs are too high and whose debts are growing, you may wish to consider liquidating redundant companies in your business group to replace assets, reduce the number of employees, or restructure your departments to remove unnecessary management costs.

    Here at 365 Employment Law, we have decades of experience working with and advising companies that are looking to restructure. For advice and support with choosing the best way to restructure your business, get in touch with our dedicated team of employment solicitors for an informal conversation about your needs.

  • Business Restructuring Consultation

    In organisations with 50 or more employees, employees have a legal right to be informed and consulted, with a view to reaching an agreement, on decisions likely to lead to substantial changes in work organisation or contractual relations.

    If a formal agreement exists, you must inform and consult employees about:

    • The economic situation of the business;
    • Job prospects; and
    • Major changes in how work is organised.

    If a formal agreement does not exist, you must inform and consult employees about:

    • Plans to sell the business or buy a new one;
    • Amendments to an occupational or personal pension scheme; and
    • 20 or more redundancies in any 90 day period at any single place of work.

    During the consultation period, you should meet with any affected employees and obtain their opinions on the planned reorganisation, along with their views on how redundancy may be avoided or its impacts mitigated. You should give conscientious consideration to any points raised.

  • Our Restructuring and Insolvency Services

    Business Turnaround

    If your company is facing significant financial or operational challenges, we can help you to take corrective actions to return the business to profitability, stability, and long term growth, known as business turnaround.

    Business turnaround will involve identifying the root cause of your company’s issues and implementing strategic changes to correct them. This could involve leadership changes, cost cutting, efficiency improvements, strategic refocusing, cultural changes, or any number of other company shifts.

    Legal Restructuring

    A shift in the responsibilities of your senior staff can make restructuring a necessity. If this is the case, we can support you in making decisions to incorporate new investors into the company, or alternatively to change the ownership structure of the company in cases where a business unit leaves the group.

    Insolvency

    When financial challenges arise and your business is no longer able to pay its debts, having the right guidance can make all the difference. Our team of experienced employment law specialists can support you in assessing your options, implementing practical solutions, and navigating your situation with confidence and clarity.

    Company Voluntary Arrangements (CVA)

    Owing creditors can put your company at huge risk, making debt one of the most common motivators for business restructuring.

    If you think your business will be profitable again in the future, we can help you to arrange and enter a legally binding agreement with your creditors called a Company Voluntary Arrangement (CVA). This will provide you with short term relief from your debts in return for a guarantee that you will honour them in the future.

    Receivership

    In a receivership, a court will appoint an official receiver to assist creditors in recovering funds in default with a view to returning your company to profitability. We are expertly placed to assist you in navigating a receivership.

    Liquidation

    Insolvent companies are closed down and their debts repaid to creditors out of the available assets through a process known as liquidation. We can assist you in winding up your company or winding up a subsidiary of your holding company.

    Commercial Recoveries

    Also known as business debt collection, our legal experts are able to assist you in collecting unpaid debts from other businesses by approaching the company to request payment and taking legal action in the event of non-payment.

  • Business Types We Can Help

    Our dedicated team of legal experts are well placed to assist a wide range of business types with restructuring, including but not limited to:

    • Lenders;
    • Business directors;
    • Commercial businesses;
    • Retail businesses;
    • Startups; and
    • Insolvency practitioners.

    For advice and support with restructuring your business, get in touch with our dedicated team of expert employment law solicitors for an informal conversation about your business needs.

    Legal Considerations of a Business Restructure

    Corporate Law Compliance

    Throughout the process of restructuring your company or making other significant company changes, you must ensure your business remains compliant with all relevant statutory and regulatory requirements and also ensure your business’ own specific interests are taken into account.

    Corporate law compliance will protect your company from fines, legal action, and reputational damage whilst ensuring your operations are legal and ethical.

    We can assist your company in remaining compliant with corporate law by working with you to create policies, procedures, and training initiatives, as well as supporting you with writing compliance reports that demonstrate your company’s adherence to internal controls and external standards.

    Employment Law

    If your restructuring could involve redundancies or transferring a part of the company, there are legal requirements around the following:

    • Consulting the workforce;
    • Seeking to avoid job losses;
    • Having fair redundancy selection criteria;
    • Ensuring continuity of employment when employees are transferred from one business to another;
    • Having provisions for laying-off employees or short time working; and
    • Varying a contract.

    Redundancy and Collective Consultation

    You must follow collective consultation rules if you’re making 20 or more employees redundant within any 90 day period at a single establishment. We advise HR departments in managing this process.

    There are no set rules to follow if there are fewer than 20 redundancies planned. However, it’s good practice to fully consult employees and their representatives.

    For a potential redundancy situation to be fair and legally compliant, you must:

    • Consult on ways to avoid the redundancies;
    • Select employees to be made redundant fairly; and
    • Identify and offer suitable alternative employment where possible.

    Contractual Obligations

    Changes to an employee’s contract, especially changes to salaries or working arrangements, should be done by mutual agreement wherever possible. Employees should be given the opportunity to discuss alternative solutions so that they feel a part of the process.

    Alternatively, employers may terminate the original contract with proper notice and by following relevant procedures where mutual agreement is not possible. A new contract with revised terms can then be offered to the employee.

    Continuity of employment will be preserved if the employee accepts the new contract. If the employee rejects the new contract, the termination will be considered a dismissal. Eligible employees may subsequently be able to claim unfair dismissal before an employment tribunal.

    Insolvency Law

    If you are restructuring your company with a view to saving costs, or with a view to corporate rescue, it is important to factor insolvency considerations into your decision, including possible claims by creditors or shareholders which could arise as a result of relocating your assets and liabilities.

    As restructuring is usually an internal procedure, less attention is often given to transfer values, which can result in a breach of insolvency rules. We can help your company to transfer assets in line with insolvency law, avoiding any potential personal liability or any future attempts to unravel the transaction.

    Tax Implications

    With tax being one of the key business costs, is it imperative that tax implications are considered in detail before any restructuring decisions are made.

    Where a restructuring involves asset sales, this may incur corporation tax on capital gains, capital gains tax for shareholders, stamp duty, and possibly VAT. There may also be income tax or corporation tax liabilities associated with any loan restructuring or debt forgiveness. Please get in touch with our experienced solicitors for more support with the tax implications of business restructuring.

    Data Protection and Privacy

    We can help you to remain compliant with General Data Protection Regulation (GDPR) rules throughout your restructuring process. This may include remaining respectful of data subject rights, updating data sharing agreements, or handling personal data securely during mergers, acquisitions, or transfers.

    Financial Arrangements and Commitments

    Understanding your existing financial commitments is crucial when looking to restructure your company. Our experts can help you to navigate renegotiations, manage creditor relationships, and address pension liabilities whilst prioritising the protection of your business’ financial stability throughout the process.

  • Why Choose 365 Employment Law?

    If your organisation is preparing for a restructure or a related change, contacting an experienced employment law solicitor can provide you with instrumental support throughout this process. If you’re looking for employment law advice and support, 365 Employment Law will work with you every step of the way to ensure you achieve the best possible outcome for your business.

    We have a wealth of experience advising employers across Sussex in all aspects of employment law. We support employers in a range of contentious and non-contentious employment law matters based out of our office in Worthing, West Sussex. Get in touch with our friendly team today for an informal conversation about your business needs.

  • Frequently Asked Questions

    What areas do you cover?

    At 365 Employment Law, we provide comprehensive employment law services to businesses in Littlehampton, Bognor Regis, Chichester, and Brighton. Our team of experienced employment lawyers is committed to ensuring all our clients receive legal advice and representation tailored to their specific needs.

    How long does a typical restructuring process take?

    The timeline for restructuring will vary depending on the complexity of your specific situation. Simple restructurings may take a few months, while more complicated cases involving negotiations with creditors or legal proceedings could take six months to a year or more.

    Can restructuring help to avoid bankruptcy?

    Restructuring is often used as a strategy to avoid bankruptcy. By reorganising your company’s finances and operations, you may be able to reduce your debts, improve your profitability, and restore your business’ financial health.

    What are the potential risks of business restructuring?

    Potential risks of restructuring your company may include legal challenges from creditors, losing key employees, damage to the company’s reputation, or operational disruptions. Receiving legal guidance with your restructuring can help you to ascertain a clear plan in order to minimise these risks during the process.

    How do I know if restructuring is the right option for my business?

    A thorough assessment of your business’s financial health, operational efficiency, and long term goals will be necessary to determine whether restructuring is the right option for your business. Consulting with legal experts can help you to evaluate the situation and decide on the best course of action.

    What should I do if I think my business needs restructuring?

    If you believe restructuring could benefit your business, the first step is to consult with an experienced employment law solicitor who can assess your situation and provide tailored advice. Early intervention can help you to explore restructuring options before issues become critical and make optimal decisions for your business.

    What role do creditors play in the restructuring process?

    Creditors play a significant role in the restructuring process, as they may need to agree to changes in payment terms, debt reductions, or repayment schedules. Negotiating with creditors is a critical part of financial restructuring, so having experienced legal advisors onboard can be instrumental for you to secure favourable outcomes.

    Can a company restructure if it’s already in administration?

    A company in administration can still undergo restructuring; administration is actually often used as a starting point for restructuring, allowing the company to restructure its debts and operations while being protected from creditors.