As your business grows and your business needs change it is wise to review whether or not your business structure is appropriate.  James Johnston discusses this important issue.

A review of your business structure can ensure that your business is positioned to take advantage of changing market conditions and trends.  It can also ensure that your business can maximise opportunities for growth and returns.

Key considerations include:

Taxation

• Are you paying too much?
• Do you need to pay tax?

Control

• Who controls the business and is this appropriate in the current climate?
• What happens when the climate changes?

Ability to Expand or Retract

• Is your existing structure able to cope with expansion?
• What about joint ventures?
• What about injections of capital?

Flexibility

• Is the existing structure able to adapt to changing circumstances?

Clear Rules

• Is your partnership deed, trust deed or company constitution clear?

Succession

Have you got the succession plan in place for your business, especially where the business is a family one?

Common scenarios include the following:

A sole trader may for instance wish to expand and turn the business into a partnership.  An existing partnership may consider a limited liability company structure.  An incorporated society may wish to choose a charitable trust structure.

There are a number of options and structures available.  There are many pros and cons to consider but a regular review will ensure that you have the right structure to meet your ever-changing business needs.

A regular review can confirm that your existing structure is working well.  Sometimes a few enhancements may be required to the existing structure rather than a brand new structure.

We recommend that reviews be undertaken at least once every three years.

Consult your legal advisor in the first instance to go over the underlying documentation; scope the job; discuss the options; and to provide an estimate of the cost.

Taking the time to get this part of your business right can add significantly to your bottom line and ensure the ongoing success of your business.