Corporate simplification project – case study

A corporate simplification project involving the removal of 170 dormant entities from a well-known blue-chip Plc.

We were engaged to assist with an internal restructure and corporate simplification project removing circa 170 dormant group entities. These entities no longer served a purpose, leading to the Group incurring unnecessary costs dealing with statutory governance, including the production of annual accounts.
The Group requested that we undertook a due diligence exercise to advise whether each entity should enter Members’ Voluntary Liquidation or a Strike Off procedure.

An initial assessment of each entity was undertaken, including a review of each entity’s assets and liabilities. Discussions were also held to establish any potential and contingent creditors such as claims from employees, outstanding warranties, and potential litigation. In addition, discussions were held in relation to pension issues and lease obligations to provide guidance on how best to conclude matters prior to entering Members’ Voluntary Liquidation or Strike-Off.
Liaison with the Group’s Tax, Company Secretarial, and Property departments, to plan and coordinate the way forward, ensuring that all matters were dealt with in a tax-efficient, risk-averse way, with a special checklist provided to ensure all matters covered.

The number of entities within the Group was reduced from 235 to 65.
The Group no longer incurs unnecessary administration, holding, company secretarial, accounting, or audit costs in respect of these entities. The Group also no longer incurs management time dealing with the ongoing corporate governance requirements.

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