Why slimming down your corporate structure should be one of your New Year's Resolutions...

The elimination of surplus companies through solvent liquidation or strike off is increasingly becoming a hot topic being discussed in the board room. This is particularly common where merger and acquisition (M&A) activity has resulted in a cumbersome group structure chart which needs rethinking.


What’s the good news?
A well-planned and implemented simplification exercise can have a payback period of just 12 to 18 months.

Amongst the many advantages of a solvent liquidation, both ongoing and potential issues can be addressed and brought to a head. In the majority of cases, ‘potential’ creditors only have a window of 1 month to formally make a claim in the liquidation. If this claim is formally rejected by the liquidator, the claimant must then apply to the Court should they wish to pursue their claim further. In this way, any spurious claimant would back away, whilst any valid claim would be dealt with quickly and settled as part of the liquidation.


And the common misconceptions…
Unfortunately, many groups wrongly believe that if there are ongoing disputes in any entities they are unable to put them into solvent liquidation until they are resolved. This is not the case.

Instead of claims rumbling on over several years prior to liquidating a company, the liquidator can address all claims in the liquidation period whilst working with all parties to ensure that the liquidations can be concluded as quickly as possible.

So what about your dormant companies? If you have any questions on dealing with claims in the liquidation period (including employee claims) then ask away using the comment box below. Or if you would like to discuss slimming down your corporate structure in private, please get in touch using the details below or click here to schedule a meeting.

Kate Rosie | Corporate Simplification specialist
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