If you have been running a business for some time, you may not have thought much about how exactly your business is organized. However, for many companies, reorganization can potentially offer a number of legal and financial benefits. But what exactly is a business reorganization, and why might you want to consider one for your company?
What is a Business Reorganization?
In simple terms, a business reorganization is when you choose to change the formal structure of your business to alter how it operates. This often means changing from one type of business to another, such as moving from a partnership to a Limited Liability Company (LLC), or it could mean filing to incorporate your company. It may also mean creating or eliminating positions within your company, or consolidating redundant departments or business structures.
Why Might You Want to Reorganize Your Business?
There are countless reasons why business reorganization might be a good idea, although there are three issues that tend to come up more often than most. First, many companies will reorganize to help protect themselves from potential legal or financial liability, which is offered by LLC and corporations. Second, as a company grows or market conditions change, it may become necessary to reorganize to keep up with shifting demand. Third, certain types of businesses have different tax obligations, which can affect how much it costs to operate your business.
What Are the Potential Benefits of Reorganizing?
First and foremost, business reorganization can help protect you if you find yourself in court due to unpaid debts, business litigation, or other types of liability. Second, it can help to limit your tax burden, allowing you to enjoy more of your profits. Finally, it can help you to restructure any parts of your business which have become redundant or inefficient so your company can operate better.
What Should You Do?
To understand the full benefits of a business reorganization, you should speak to a lawyer with experience handling business law matters. They can review your potential legal options and help you devise a business structure that best suits your needs. The sooner you call, the sooner they can get to work for you.
If you have a business law issue, give the Law Office of Andrew Ross Sack a call. Andrew Ross Sack is a New York and New Jersey business lawyer who has considerable experience in handling the many aspects of business law. To schedule a consultation with New York City/Long Island/Westchester business lawyer Andrew Ross Sack, call (516) 526-3319 or visit his contact page.
