Corporate restructuring, as part of a strategy of expansion: when changing the structure of your society, that is, the best way to grow

To grow in today’s market is a challenge that requires a lot more good ideas and products. To achieve the expansion of the security, it is essential that your company has a corporate structure that is appropriate to their goals. In this scenario, the restructuring itself as a strategic tool, able to prepare the business for a new development cycle, with more certainty and clarity in decision-making.

What is corporate restructuring?

Corporate restructuring is a set of legal operations provided for in the brazilian corporate law in relation to corporations in business with the objective to modify the structure, composition and functioning. They are legal documents that allow for the adaptation of companies to the economic reality, the regulatory environment, or the new year.

The main types of rearrangement are:

• Spin-off occurs when a company transfers a portion of its assets to one or more other companies, which may result in the company being spun-off (spin-off of total) or a continuum (spin-off).

• Fusion is the union of two or more companies which are cut to form a new one that will take over your legal rights and obligations.

• Incorporation is the process by which one or more of the corporations are absorbed by another, which of them will succeed to all their rights and obligations, such that only a real estate developer.

• The transformation occurs when a company changes its corporate type (for example, from limited liability company to a joint stock company), there is no dissolution of, or the creation of a new legal entity.

These operations must be carried out in accordance with the legal procedures, including the resolution of the shareholders, the preparation of the acts of the company are certain to as a protocol, rationale, and contract modifications) and the registry at the relevant bodies.

More than just a formal step, a corporate re-organization, should be understood as part of a comprehensive medium-and long-term, and have a direct impact on the governance, management, and positioning of the company in the market.

The establishment of holding companies as the engine of economic organization.

It is possible to restructure as an alternative of recurrent, is the creation of holding companies — companies whose primary activity is the participation in the equity of other companies. The holdings can be used for a variety of purposes, such as:

• The centering of the management of the group’s business;
• The organization of the asset and the holding company; and
• Design planning succession in the family.

Depending on their composition and purpose, the holding company may be pure when it is devoted solely to the company’s interest) or in combination (for example, when, in addition, carries out activity in operating assets). The constitution has to be in line with the reality, and the objective of the company’s or the group’s economic, always taking into account the limits of the law, and the transparency of its operations.

When a corporate re-organization can be beneficial?

1. The expansion and reorganization of the operating

Companies on growth-you can adopt more complex structures, such as a subsidiary, or a subsidiary, in order to target the areas of the business, to distribute the responsibilities, and to allow for greater administrative efficiency.

2. With the new investments and / or partnerships

The clarity of the structure is the key factor to attract investors and new business partners. In the reorganization, it can ease to entry to the capital, and to provide more legal certainty to the parties involved.

3. Planning the succession, and the continuity of the management of

For societies, families, to re-order allows you to organize the succession of the order, with a clear definition of roles and division of fees and the rules of governance, and avoiding future conflict between his heirs and thus ensuring the longevity of your business.

4. The improvement of the structure of the tax within the law

Depending on the model of corporate governance, and the tax system is adopted, the re may result in a model that is best suited to the economic reality of the company, subject to compliance with the principles of legality, good faith and in the substance of economic transactions.

Care is essential to promote the re-organisation.

The change in the corporate structure should be carried out with the planning and follow-up expert. Some of the critical points include the following:

• A survey of the risks and liabilities: hidden;
• Tax compliance, labor and employment, and corporate;
• Evaluation of the accounting and financial assets;
• The drafting of legal documents in a consistent and contracts, by-laws, agreements, members); and
• Registration and communicating with the appropriate authorities, as the Board of Trade, and the internal Revenue service.

It is important that the reorganization be the basis of technical, economic purpose, valid and in accordance with the legislation in force and to avoid man-made structures, or focused solely on the economics of taxation.

Corporate restructuring is a strategy that’s smart for companies that want to grow with structure and predictability. When well designed, it makes it possible to adjust the business model to the realities of the business to mitigate risk and facilitate the succession, and to increase access to opportunities in the market.

This is a strategic decision that must be carried out with the support of a qualified service technician, from the point of view of the rule of law, transparency, and in the collective interest of the membership. In a scenario that is increasingly complex, focused, this is the best way to ensure a strong future for a sustainable society.

Barbara Rita Escapin – a Lawyer with a degree in Law from the faculty of Integrated River in the White Foundation members in São Paulo, enrolled with the Brazilian bar association, São Paulo (OAB/SP) (2019). The training on Executive Education/the Compliance by Fundação Getúlio Vargas (2022). A post-graduate degree in Corporate Law from Fundação Getúlio Vargas. She is the author of the articles. A lawyer and a Leader of the TM is Associated with it.

Carolina Cotrin de Oliveira, a Lawyer with a degree in Law from Pontifícia Universidade Católica de Campinas (PUCCAMP). A post-graduate degree in international Law from Universidade Presbiteriana Mackenzie, brazil. Registered at the Ordem dos Advogados do Brasil, São Paulo (OAB/SP) (2019). She is the author of the articles. A lawyer for the Department, the Advisory does have Associated with it.