Complex corporate structures should be simplified to reduce costs, mitigate risks and remove superfluous legal entities. Eddie Bines, managing director, restructuring at Kroll explains the key steps to take
Our economy has seen better days. We’ve all heard the talk of ‘unprecedented circumstances’ and ‘tough economic headwinds’. We are finding that businesses are using these circumstances as an opportunity to review their operations and proactively looking for ways to simplify their businesses.
Entities upon entities
‘Simplicity is the ultimate sophistication’ is a famous Leonardo da Vinci quote that I came across recently. It made me think that I’m not sure that many large corporates abide by this tenet. There’s a tendency to make things complicated by creating more legal entities than they know what to do with.
Corporations tend to form these entities to meet specific operational or financial objectives, optimise their tax position, or are inherited through mergers and acquisitions (M&A) activity.
