Business creation and re-structuring – with recovery comes new opportunities

Business creation and re-structuring

 

We are seeing a great many of our commercial clients’ re-visit their business structure and considering new service or product launches in order to respond to changing market conditions.

History shows us that recessions and coming out of recession can be a good time to launch a new business. As the BBC recently reported:

“GM launched in 1908, when the US economy was in turmoil after ‘the Panic of 1907’ financial crisis. Meanwhile, Burger King flipped its first patty in 1953, when the US was again in recession, and CNN started its news broadcasts in 1980, when US inflation hit almost 15%. Both Uber and Airbnb set up business during the global financial crisis of 2007-09.” Furthermore, early reports suggest that 2020 was a record year for new business start-ups.

For other businesses it might be a time to refocus activities perhaps changing their service or product mix or perhaps going further and completely re-structuring a business perhaps closing down one business operation in order to focus on another.

This kind of major strategic activity often comes with considerations around the legal basis of a business, funding and supply agreements and potential tax and liability issues. Gaining financial support from investors or lenders is often required and the obligations that can be written into these agreements require careful consideration. From an employment perspective employees cannot simply be ported from one business unit to another.

Whilst this is a time when entrepreneurs will come to the fore, as ever their creativity and boldness must not be compromised through a lack of appreciation of the legalities of their plans, no matter how innovative.

For further advice on launching or re-structuring a business contact Sukh Saini at Pictons.

T: 0800 302 9448

E: info@pictons.co.uk

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