Frequently we find that clients’ businesses grow in unexpected ways and for a number of reasons, but the need to demerge two businesses or certain assets most commonly arises for tax purposes.
The most common form of demergers are statutory processes which can come with many complications and which, if not handled correctly, can cause significant problems for the parties involved.
We can offer you expert advice throughout every stage of the demerger process – from the earliest planning stages, through the implementation, to the delivery of a successful conclusion. We minimise the disruption and allow you to make the smoothest possible transition to becoming a demerged business.
The most common reasons for demerger tend to be:
- Accumulation of non-trading assets (e.g. cash)
- Protection of tax reliefs
- Maximising the value of two businesses by separating them
- Separating two otherwise unrelated businesses prior to sale
- Protecting non-trading assets from commercial risk
- Protecting a successful division from a poorly performing division