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Should you be following in Google’s footsteps?

25 November 2015

Google recently announced that it is to undertake a major re-organisation of its business with the creation of a new holding company, Alphabet Inc.

This new company will manage its non-core business elements such as the investment and research divisions and the drone business.

The impetus for the reorganisation seems to be efficiency, but there are many reasons why a group of companies may choose to reorganise itself:

Tax – many intra-group reorganisations take place specifically to secure tax advantages.

Before an acquisition – when a group is planning to buy a new company or business, a pre-acquisition reorganisation can allow a company to form a new subsidiary in its group structure, which may be necessary for the proposed acquisition.

Before a sale – a pre-sale reorganisation is often undertaken when a group or company wishes to sell part, but not all, of its business (eg. if a company proposes to sell one of its business divisions but that business is not already a standalone company).

After an acquisition – to ensure that the acquired assets fit into the group in the most appropriate place (eg. a target company or its business could be hived down into an existing operating subsidiary of a group, or intellectual property may be transferred to an intellectual property holding subsidiary and then licensed back to an operating company).

Efficiency grounds – a reorganisation for operational or administrative reasons (eg. to reduce the size of a group structure, or to provide a standalone subsidiary).

If you think your group or company would benefit from a reorganisation or restructuring please contact us or read our fact sheet on ‘Planning a reorganisation? Here is where to start‘.

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Our corporate & commercial team is rated by national legal guides The Legal 500 and Chambers UK. The department’s expert lawyers can help businesses big or small on a variety of corporate challenges that may arise.

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
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