maintaining scientific, technical, production and human resources at an optimal level;
achieving balance and harmony between the interests of the company, clients and society;
implementation of measures to repay debts to creditors;
payment of debt to the budget;
minimizing layoffs and creating new job vacancies;
ensuring the protection of shareholders' rights.
Types of company restructuring
The selection of appropriate types of restructuring singapore business mailing list is based on the interests and resources of the company, taking into account external circumstances. Changes may affect the scope of activities, organizational structure, capital, and control system.
The different types of company restructuring are listed in the table:
Restructuring parameter Name of the type of restructuring
Growth phase of the enterprise
operational (if it is necessary to overcome a crisis situation in the organization);
strategic (to ensure stable operation of the organization).
Initiating party
passive, when the enterprise needs structural changes due to the prevailing external conditions;
active, in which the company itself initiates structural changes.
Intensity of interaction with external factors
external, focused on adaptation to environmental conditions;
internal, aimed at adjustments within the organization and independent of environmental influences;
Company's scope of activity
comprehensive (for all areas of activity);
element-by-element (for individual components, including production, financial processes and management systems);
multi-element (for a set of different elements of the system).
Period of implementation
short-term;
medium term;
long-term.
Level of accountability and means used
centralized, carried out in a company on the initiative and under the supervision of state (municipal) bodies with the involvement of external financing;
decentralized, carried out by the enterprise without external control and financing (only with its own resources);
mixed, involving the use of both own and borrowed funds.
Number of operations or steps performed
single stage;
multi-stage
Procedure
step by step;
abrupt (jumpy).
The types of company restructuring do not have strictly defined boundaries, and sometimes at different stages of the procedure there may be overlaps or repetitions of actions.
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5 Ways to Restructure a Business
To better understand the restructuring process, it is necessary to analyze 5 methods that are used to achieve a complete result:
Unification
A merger involves the transfer of all assets, rights and obligations to another company. The first organization ceases operations, while the second continues to operate.
This type of restructuring is often chosen to liquidate unprofitable companies without paying off debts to creditors, fulfilling tax requirements and monitoring financial statements. By law, closing a company with debts to the budget and off-budget funds is not allowed.
Unification
Source: shutterstock.com
Even if the company has no debts, if it files an application for voluntary liquidation, the tax authorities will initiate an audit of its activities. This audit may reveal additional tax liabilities or lead to the accrual of penalties.
Merger
Restructuring of a group of companies is carried out by merging the assets, rights and obligations of several legal entities, which are united into one new structure. An actual organization is created, and the previous ones cease to exist.
Mergers can be used to liquidate inefficient companies, consolidate assets, and increase business profitability. Such a process helps to increase attractiveness to investors, improve business processes, and reduce operating costs by eliminating duplicate functions, management layers, and other elements.
Division
It is a process by which one organization is divided into several new legal entities, each of which receives some of the assets, liabilities, and rights of the original organization, after which the latter ceases to exist.
Department
It involves the formation of a new legal structure that inherits some of the property, rights and obligations of the existing organization, while continuing to function.
Reorganization
The process involves changing the organizational structure and legal status of the company. The firm becomes a new legal entity.
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Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
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