SB Partners provides support to businesses in need of corporate reorganization in Burlington, Oakville, Hamilton, and surrounding areas

What is Corporate Reorganization?

Corporate reorganization is a process of changing how a business is configured. It can include bringing on new owners or shareholders, moving assets from one part of a business to another or even creating a trust. During this process, it is important to consider the tax implications for the choices you make now and in the future.

A corporate reorganization often stems from change, be it business direction, fluctuating markets, personal circumstances, or tax liabilities. Regular reviews with your CPA can help you identify when and how a corporate reorganization could be beneficial to you and the business.

Corporate reorganization is a good way to:

• Take advantage of changes in tax benefits and regulations
• Utilize capital losses
• Limit the liability of shareholders
• Prepare for a merger, acquisition, or sale of the business
• Expand into new provinces or across the US border

When should I consider a corporate reorganization vs a corporate restructuring?

While the two terms are often used synonymously, there are differences.

A restructure is usually a result of serious financial hardship and is an attempt to avoid further financial distress.

Whereas a reorganization looks at the legal or operational structures of a company for the benefit of tax responsibilities, mergers and acquisitions, or making sure your family is taken care of in the future.

There are many different reasons to consider a corporate reorganization; some are time-sensitive, and others are about future-proofing the corporate structure. You may be looking to combine companies to balance profits and losses, create holding companies or family trusts, eliminate inactive companies or simply to make the most of the ever-changing tax regulations.

If you are unsure what your business needs, contact one of our advisors.

Why Consider a Corporate Reorganization?

The main purpose of a corporate reorganization is to analyze the business at the moment, consider changing markets, understand regulatory requirements, address financial hardships, and update the structure if required.

Our team of experts can help you look at the options available to you in the current climate and understand the tax implications of each option.

Manage your tax liabilities

We all pay enough taxes. But with changing landscapes and regulations, there are often opportunities to reduce your tax burden through reorganization and tax planning. Talking to an expert on a regular basis allows you to scrutinize your business, looking at where you are today and where you want to be in the future.

Limit risk

Every organization runs with a certain element of risk, but understanding how the structure of your organization can help protect you and your shareholders from personal financial and legal liabilities makes good business sense.

Increase financial efficiency

As businesses grow, so too should their corporate structure. Too often, small business owners develop their company with a day-to-day mindset, lacking the insight and experience to structure their business in a way that makes it efficient in the future. Working with an industry expert can help you choose the most efficient structure today, as well as shape your plan for evolving in the years to come.

Protect what is yours

Many small businesses start as informal partnerships. Once a company reaches a certain size, it is important to make sure that the company is structured in a way that benefits all parties. Reorganizing a company gives you a chance to formalize your ownership arrangements and responsibilities.

Sell all or part of your business

Part of running a business is knowing when it’s time to sell all or part of your business or hand over the reins. The structure of your business may make this easy or it may offer several stumbling blocks you are not expecting. Our advisory team will take time to understand your needs now, and in the future, and offer suggestions that make the transitional process as smooth as possible.