TRUST GLG LEGAL FOR BUSINESS STRUCTURE ADVICE

Understanding the difference between the various types of business structures is vital when starting a business. This key decision is based on various aspects of your business, its vision, and how you want to run it.

The commercial team at GLG Legal will assist you in planning or changing your company structure to ensure your business operations continue to run smoothly. From small business owners to large corporations, our business structure advice is tailored specifically to the unique needs and requirements of your company. Whether you are a new business looking for guidance or an existing one looking for business restructuring advice, GLG Legal can provide innovative solutions to help you reach your business goals. 

 

WHAT IS A BUSINESS STRUCTURE?

A business structure is a term used to describe the legal recognition of your business. As different business structures have different legislative requirements, it is important to ensure that it is clear what structure your business is using and that your business is meeting these legislative requirements.

The four most common business structures are:

• Sole trader
• Company
• Partnership
• Trust

We encourage you to contact us to obtain expert business structure advice. Our team can help you understand the right structure for your business.

SOLE TRADER

This is one of the simplest business structure options available and is inexpensive to set up in comparison to other business structures. If you plan to use this business structure for your business, it is important to be aware that you will be legally responsible for all aspects of the business, including losses and debts owed to creditors.

The main benefit of a sole trader structure is that it provides you with full control over the business, fewer legislative requirements, and is inexpensive to establish. This is a suitable business structure for those who have just started their own business.

PARTNERSHIP

The partnership business structure involves two or more people running the business and distributing the profits and losses between themselves. A partnership is often set up through a partnership agreement which needs to be carefully drafted to ensure that all parties to the partnership are protected. There are different types of partnerships that our lawyers will be able to assist in choosing the most appropriate type for your business.

The advantages of this business structure are that it is inexpensive to set up, it has fewer legislative reporting requirements, and it enables you to combine resources with other people (i.e., the partners).

The main disadvantage of a partnership is that all partners are personally responsible for any debts incurred by the partnership. It is therefore extremely important to consider who you wish to establish a partnership with. 

COMPANY

Companies as a business structure are one of the most common ways businesses tend to be structured. There are several legal processes involved in setting up a company correctly, so it is strongly encouraged to seek assistance from the lawyers at GLG Legal who have extensive experience in setting up companies.

The primary benefit of this business structure is that it forms a separate legal entity which provides many benefits including, but not limited to, being able to sue and be sued and being able to own property. Another benefit is that there is the option between a public and private company which will influence how your business can raise capital. Your business, its size, and turnover are all determining factors as to whether your company is more beneficial in being a private company or a public company. Our lawyers will be able to assist you with your choice.

The main disadvantage is that companies are heavily regulated by legislation and they can be expensive to set up. In particular, public companies have further reporting requirements which may become onerous if it is not the correct business structure for you.

TRUST

A trust is an obligation imposed on a person to hold property or assets for the benefit of the beneficiaries. Operating a business as a trust can be expensive and does require the trustee to undertake various administrative tasks in the process.

There are different types of a trust business structure, and depending on your business’ needs, we will be able to assist you in determining which type of trust is the most appropriate for your business, and whether to appoint a corporate trustee.The main advantages of this business structure are that they are very flexible when it comes to tax obligations and purposes, and the beneficiaries will not be held responsible for any debts incurred by the trust. The main disadvantage is that a trust is a complex legal structure and the operation of a trust is restricted to what is outlined in the trust deed.

WHY IT IS IMPORTANT TO CONSIDER THE DIFFERENT BUSINESS STRUCTURES AVAILABLE

It is vital to choose a company business structure that reflects your business’ needs as it will determine many factors and limitations that you will have when running your business. Ensuring you have the right structure will not only contribute to the success and growth of your business but will also provide protection for personal assets if something were to go wrong. That is why we recommended seeking business structure advice from an experienced legal professional. Depending on which business structure you eventually choose, the following may vary:

• How much tax do you pay
• What legal documents are required
• If and what licences you may require
• Whether you are an employee or the owner of the business
• Whether you are personally liable for any debts incurred by the business
• How much control do you have over the business and its operations
• The ongoing cost and reporting requirements

It is also possible to change your business structure through restructuring should the business structure you had originally chosen no longer suit your business needs. It is encouraged to seek legal advice when your business is undergoing major changes to see if a different business structure may be more suitable for your business and its interests.

 

WHAT IS BUSINESS RESTRUCTURING?

A business restructure is a strategic process that involves making significant changes to the organisational and operational aspects of a company with the goal to improve efficiency, competitiveness, profitability, or overall performance. Restructuring can encompass a wide range of changes that are tailored to your company’s specific needs. Some of the most common aspects of a business restructuring plan include:

• Financial restructuring
• Operational streamlining
• Technology integration
• Staffing changes

Company restructuring can be a pivotal step in optimising your business’s performance, adapting to changing circumstances, and achieving your long-term goals. At GLG Legal, we provide business restructuring advice tailored specifically to your company and what you want it to achieve.

 

WHAT IS THE BUSINESS RESTRUCTURING PROCESS?

The restructuring process begins with a comprehensive assessment of your current business structure and operations. Our experienced team takes the time to understand your unique business needs, goals, and challenges. We analyse your financial position, legal obligations, and growth prospects before developing a plan with you, providing guidance during the entire restructuring period. 

Our commercial law experts at GLG Legal ensure that your newly chosen structure complies with all legislation and aligns with your company’s goals.

WHY WOULD I NEED TO CHANGE MY BUSINESS STRUCTURE?

When thinking of business restructuring, many people often think of business failure, financial difficulty, insolvency and voluntary administration through liquidation. But this is not always the case. There is a wide range of reasons why your company may need a new business structure, including:

• Changing business goals
• Legal and regulatory compliance
• Liability protection
• Estate planning
• Partnership changes
• Market expansion
• Exit strategy
• Asset protection

No matter the reason for the change, GLG Legal can assist with both a large and small business restructuring process.

 

CONCLUSION

Having the right business structure is an essential step in creating a business so it is important that you get it right in order to prevent any repercussions from occurring to your business later. Our lawyers at GLG Legal have worked extensively with different businesses with various types of business structures and will provide business structure advice based on what is most appropriate for your business.

We can assist you with ensuring that you are aware of all your legal obligations and requirements as your business grows under that business structure and draft the appropriate legal documents that are unique to your business and its interests.

We also understand that life is unpredictable and circumstances can change, so if you are looking for a new business structure, we can help you look into what is best for your company, craft a restructuring proposal statement, and help implement your new structure effectively. 

GLG Legal also assists clients with the structuring of their business assets and asset protection.