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6 rules for restructuring an organization

Posted: Sun Jan 12, 2025 7:49 am
by Maksudasm
What needs to be taken into account for a successful company restructuring:

Determine how many companies you will need
The restructuring process should begin with an assessment of how many companies are actually required to run the business effectively. It is impossible to state unequivocally that three types of legal entities are required: for asset ownership, sales, and operational activities.

Each specific situation requires an individual approach, taking into account the type of business, number of partners, regional offices. Discussion and decision-making should be collective, covering all top managers, and not limited to the legal department.

Consider the time frame for registering rights and obtaining licenses
When planning a company's restructuring, it is necessary to take into account the time costs of registering vehicles, real estate and hazardous industrial facilities.

These procedures can be lengthy, so tongliao phone data t is important to plan for possible delays in advance so as not to stop production due to, for example, the lack of necessary rights to equipment in a newly created company as a result of a merger.

Consider the time frame for registering rights and obtaining licenses

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Similar difficulties may arise with obtaining permits from a self-regulatory organization, certification of workplaces. The process of registration of hazardous industrial facilities can last up to a month, provided that they are managed correctly, and certification of workplaces depends on their number.

In addition, large customers often require ISO certification, which can also take up to a month to obtain.

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Monitor compliance with the deadlines for corporate procedures
The process of any company restructuring involves making corporate decisions and adhering to procedural deadlines.

This is especially important if there are foreign companies among the participants or partners, as additional difficulties with documents may arise. For example, an apostille or consular legalization may be required, which may delay the process.

Similarly, holding a shareholders' meeting requires compliance with the minimum notice period established by law, which is 20 calendar days and may be increased depending on the agenda. It is not possible to shorten this period.

It is important to take into account that shareholders or participants may be located in different cities and countries, and the process of issuing powers of attorney to participate in the meeting may be complex.

Don't forget about credit obligations
During restructuring, especially if the company has outstanding loans, changes in the structure and composition of the owners require approval from the bank. Many companies do not take this into account in advance and encounter problems at the stage when the transformations have already been launched, and it is too costly and ineffective to return the situation back.

The main difficulty lies in the fact that the financial service may incorrectly assess the consequences of the company's restructuring, while the legal department may not take into account all the requirements for financial obligations specified in loan agreements.

Don't forget about credit obligations

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Effective communication between the finance and legal departments will help determine what terms need to be agreed upon with the bank before restructuring begins. For example, many loan agreements stipulate that changing the company structure without approval may result in a requirement to repay the loan early.

It is important to take into account that when restructuring a company, which involves a change of owners, it will be necessary to make changes to the registration records for the new successor of the mortgaged property.