Intra Group Transfers / Reorganisation

Our specialist Corporate Solicitors can assist you and your business with the full range of intra-group reorganisations, including transfers and demergers.

We are able to structure and deliver practical and effective solutions to meet your requirements.

An intra-group reorganisation is usually the transfer of assets within a group of companies that is undertaken for the purpose of reorganising the group’s structure and the way it carries on business.

An intra-group reorganisation can apply to a large or small transfer of assets or purchase or sale of a company within a group.

Why Carry Out a Group Reorganisation?

Businesses carry out intra-group reorganisations for a number of reasons including:

• To boost administrative, operational or economic efficiencies (for example, centralising business support functions, such as accounts, public relations and human resources or creating greater economies of scale through combining the purchasing power of the group in relation to suppliers, stock and for raw materials);
• As a precursor to an acquisition or sale of a company or business (for example, the target wishes to sell part but not all of its business, or it wishes to amalgamate its business to provide a greater opportunity for a potential purchaser);
• After an acquisition of a company or business (for example, the business and/or assets may be hived up, down or across into another existing operating group company or land or intellectual property may be transferred to another group company and leased back to the operating company; or
• To secure tax advantages and create a more tax efficient group structure (for example, rearranging cash flows, transferring property and assets, amalgamating subsidiaries or creating new companies).

Taxation

When selling shares or assets in the course of a reorganisation, there are a number of taxes that potentially arise. These include:

• Stamp duty is chargeable on shares, other marketable securities and certain transactions involving partnerships;
• SDLT is chargeable on the transfer of property;
• An asset sale is subject to VAT unless the assets that are the subject of the transfer are exempt. However, no VAT is chargeable where it can be shown that business assets are transferred as a going concern (TOGC) within the meaning of article 5 of the VAT (Special Provisions) Order 1995).

Implementation

Intra-group transactions are often implemented and documented in a less formal way than arm’s length transactions. For corporate governance reasons, however, it is advisable to follow proper process (for example, seeking consent from third parties where required, satisfying bank requirements and compliance with TUPE) and to properly document reorganisations.

Our team of Corporate Solicitors is ranked Top Tier - Tier 1 by the independent Legal 500 directory.  In addition, Partners in our team are recommended by the Legal 500.  Therefore, you can be reassured that you will deal with some of the best Commercial Solicitors in the country.

We provide practical, commercial and coherent advice and are able to deliver a complete service with support from our Property, Employment, Commercial, Dispute Resolution and Private Client teams.

Our ethos is to provide our clients with an alternative to the major regional and national firms by offering high quality legal advice from highly experienced, specialist solicitors, but on a much more cost-effective basis.

We work closely with our clients to ensure that we meet their expectations both in terms of their objectives for a particular piece of work and in relation to costs. We are easy to deal with, clear in our advice and understand that a common sense approach is often required. As standard practice, we give our clients an estimate of the costs involved in undertaking any piece of work at the outset. We can then provide costs updates on a regular basis. In addition, where appropriate, we are happy to discuss other pricing models (for example, fixed fees) if that is helpful to you.

Examples of our work and the transactions we have recently advises on include:

• Reorganisation of share capital for a leading private fertility clinic (along with the introduction of new management shareholders) and a major refinancing and fundraising exercise to establish and fit out a custom made fertility clinic in South Manchester

• Restructuring and refinancing of a range of fruit-based soft drinks to major retailers, including the sale of a majority of the share capital of the company to a large German drinks manufacturer/distributor

• Share re-organisation of a PLC (involving groups of family members and employees), taking account of succession and tax planning

• Group re-organisation and minority shareholder buyout for a major national recruitment company

• Re-organisation of cross-border media business

• Advised on various group reorganisations (and dealing with related bank financing and security requirements) including estate agencies and kitchen manufacturing businesses