Company Demergers & Reorganisations: strategic Legal Support for Business Transformation

As businesses evolve, so too must their structures. Whether driven by strategic realignment, succession planning, shareholder disputes, or tax efficiency, company demergers and reorganisations are powerful tools for reshaping companies and unlocking long-term value.

At their core, these processes involve the separation or reconfiguration of business operations, assets, or ownership structures—often to simplify, isolate risk, or prepare for investment or sale. In the UK, there are several legal routes to achieve this, each with distinct implications for tax, shareholder treatment, and regulatory compliance.

What Is a Demerger or Reorganisation?

A demerger typically involves splitting a company into two or more independent entities. Common methods include:

• Statutory demergers under the Companies Act 2006
• Capital reduction demergers, often used for tax efficiency
• Liquidation demergers, where the original company is wound up and assets distributed

A corporate reorganisation, meanwhile, may involve:

• Transferring assets or shares between group entities
• Adjusting capital structures or funding arrangements
• Preparing for M&A activity or integrating acquisitions

These transactions are often complex, requiring careful coordination of legal, tax, and commercial planning.

Why Businesses Choose to Demerge or Reorganise

• Operational clarity: to separate distinct business lines for focused growth
• Shareholder alignment: Resolve disputes or prepare for succession
• Tax planning: Optimise structures for capital gains, SDLT, or inheritance
• Investment readiness: Make divisions more attractive to investors
• Risk management: Ring-fence liabilities or isolate regulated activities

Our Expertise

We have extensive experience advising on all aspects of corporate demergers and reorganisations. Our services include:

• Strategic structuring advice tailored to your business goals
• Drafting and negotiating all legal documentation, including transfer agreements and all corporate compliance steps
• Coordination with tax advisers and accountants to ensure efficiency and compliance
• Post-transaction support, including regulatory filings

Whether you’re a family-owned business planning for succession, a growing SME seeking operational focus, or a corporate group preparing for sale or investment, we offer pragmatic, commercially focused legal advice to guide you through every step.

If you’re considering a demerger or reorganisation, we’d be delighted to discuss how we can support you. Our team combines technical expertise with a deep understanding of business strategy—ensuring your restructure is not only legally sound but commercially successful.

Company & Business Sales and Purchases: Legal Expertise for Seamless Transactions

Buying or selling a business is a significant milestone—whether you’re planning a strategic exit, expanding your portfolio, or acquiring a competitor. These transactions are complex, high-stakes, and require meticulous legal planning to ensure a smooth process and protect your interests.

At their core, company and business sales involve the transfer of ownership—either through a share sale (transferring ownership of the company itself) or an asset sale (transferring specific business assets and liabilities). Each route has distinct legal, tax, and commercial implications.

Key Legal Stages in a Sale or Purchase

1. Preparation & Due Diligence
   • Sellers must get their “house in order”—reviewing contracts, resolving disputes, and ensuring compliance.
   • Buyers conduct legal and financial due diligence to assess risks and verify the business’s value.
2. Heads of Terms / Letter of Intent
   • A non-binding document outlining the key commercial terms, including price, structure, and exclusivity
3. Core Legal Agreements
   • Sale and Purchase Agreement (SPA): The central contract detailing terms, warranties, indemnities, and completion mechanics.
   • Disclosure Letter: Protects the seller by listing exceptions to warranties.
4. Ancillary Agreements
   • NDAs, transitional service agreements, consultancy contracts, and non-compete clauses may also be required.
5. Completion & Post-Completion
   • Transfer of ownership, payment, and regulatory filings.
   • Post-sale support, restrictive covenants, and tax planning.

Why Legal Advice Matters

These transactions are rarely straightforward. Employment law, intellectual property, tax, and regulatory approvals all play a role. Poorly drafted documents or overlooked risks can lead to disputes, liabilities, or failed deals.

Our Experience

We have extensive experience advising on company and business sales and purchases across sectors including professional services, manufacturing, technology and retail. Our services include:

• Strategic structuring advice (share vs asset sale)
• Drafting and negotiating all legal documentation
• Due diligence support and risk mitigation
• Post-completion integration and governance

Whether you’re selling a family business, acquiring a growth opportunity, or navigating a management buy-out, we offer pragmatic, commercially focused legal advice tailored to your goals.

If you’re considering a sale or purchase, we’d be delighted to help. Our team combines technical expertise with a deep understanding of business strategy—ensuring your transaction is not only legally sound but commercially successful.

Employee Ownership Trusts (EOTs): a Smarter Way to Secure Your Business Legacy 

Employee Ownership Trusts (EOTs) are an increasingly popular succession planning tool for UK business owners seeking to preserve their company’s culture, reward loyal employees, and benefit from generous tax reliefs. Introduced by the Finance Act 2014, EOTs allow shareholders to sell a controlling interest in their company to a trust that holds the shares on behalf of all employees.

This model offers a compelling alternative to traditional trade sales or management buyouts. It enables business continuity, fosters employee engagement, and provides tax advantages such as:

• 100% Capital Gains Tax relief on qualifying share disposals 2
• Tax-free employee bonuses of up to £3,600 per year 2
• Corporation tax deductions for contributions made to the trust 1

However, transitioning to an EOT involves navigating a complex legal landscape. From structuring the trust deed and appointing trustees to drafting share transfer agreements and ensuring compliance with HMRC and company law, the process demands careful planning and expert legal guidance.

Why Choose Us?

We have extensive experience advising on EOT transactions. We understand the nuances and strategic considerations involved in setting up and managing employee ownership structures. Whether you’re exploring EOTs for succession planning, employee engagement, or long-term business sustainability, we offer:

• Tailored legal advice aligned with your business goals
• End-to-end legal support from feasibility assessment to implementation
• Collaborative working with tax advisors and valuation experts

We’ve helped businesses across several sectors—including professional services, manufacturing, and construction—successfully transition to employee ownership. Our approach is pragmatic, commercially focused, and rooted in a deep understanding of the legal and operational realities of EOTs.

Is an EOT Right for You?

EOTs are particularly well-suited to businesses with stable income streams and a strong internal culture. They can be implemented quickly, often with fewer negotiations than a third-party sale, and allow founders to step back gradually while retaining influence.

If you’re considering an EOT or simply want to explore your options, We’d be delighted to discuss how this model could work for your business.

Employee Share Incentivisation: Strategic equity solutions for growing businesses

Attracting and retaining top talent is a challenge for every business. One of the most effective ways to align employee interests with long-term company success is through share incentivisation. Whether you’re a startup looking to reward early contributors or an established business seeking to retain key personnel, employee share schemes offer flexible, tax-efficient solutions.

In the UK, employee share schemes fall into two broad categories: tax-advantaged and non-tax-advantaged plans

Tax-Advantaged Share Schemes

These schemes offer statutory tax reliefs for both employers and employees:

• Enterprise Management Incentives (EMI)
  Ideal for smaller companies. EMI options are highly flexible and offer significant tax benefits, including capital gains tax treatment on disposal and no income tax or NICs on exercise
• Company Share Option Plan (CSOP)
  Suitable for larger companies. Employees can acquire up to £60,000 of shares with tax advantages, provided options are held for at least three years
• Share Incentive Plan (SIP)
  A broad-based scheme offering free, partnership, matching, and dividend shares. Shares held for five years are exempt from income tax, NICs, and CGT

Non-Tax-Advantaged Schemes

These offer greater flexibility but fewer tax benefits:

• Unapproved Share Option Plans
  Customisable schemes without statutory tax reliefs. Gains are usually subject to income tax and NICs
• Growth Shares
  A separate class of shares that only participate in future value growth. Popular where EMI is unavailable

Why Choose Us?

We have extensive experience advising on the design, implementation, and governance of employee share schemes. Our services include:

• Tailored legal advice to match your business goals and workforce structure
• Drafting scheme documentation, including option agreements, trust deeds, and shareholder resolutions
• Integration with employment contracts and exit strategies

Whether you’re launching your first EMI scheme or restructuring an existing plan, we offer pragmatic, commercially focused legal advice to help you incentivise your team and grow your business.

If you’re considering employee share incentivisation, we’d be delighted to help you explore the options. Our team combines technical expertise with a deep understanding of business strategy—ensuring your scheme is not only legally sound but commercially effective.

 Corporate Governance: building trust, accountability and sustainable success

Corporate governance is the framework by which companies are directed and controlled. It encompasses the systems, principles and processes that ensure businesses are run responsibly, transparently and in alignment with stakeholder interests.

Whatever your type of organisation, strong governance is essential to long-term success.

In the UK, corporate governance is shaped by a combination of statutory requirements, regulatory codes, and best practice guidance. These include the following areas:

• Board Leadership and Company Purpose
• Division of Responsibilities
• Composition, Succession and Evaluation
• Audit, Risk and Internal Control
• Remuneration

Core Governance Responsibilities

Boards are expected to:

• Provide entrepreneurial leadership and set strategic direction
• Ensure the company has the resources to meet its objectives
• Monitor management performance and uphold company values
• Safeguard the interests of shareholders and stakeholders
• Maintain robust risk management and internal controls

The role of the Chair is to lead the board and foster open debate, while non-executive directors play a vital role in challenging strategy, overseeing performance, and ensuring integrity in reporting and remuneration

Why Governance Matters

Effective governance:

• Enhances reputation and investor confidence
• Reduces regulatory and litigation risk
• Supports ethical decision-making
• Enables sustainable growth and succession planning

Poor governance, by contrast, can lead to financial mismanagement, reputational damage, and regulatory sanctions.

Our Expertise

We advise boards, directors, and senior leadership teams on all aspects of corporate governance, including:

• Board structuring and responsibilities
• Director duties and liabilities
• Governance frameworks for private companies
• Internal policies, codes of conduct, and committee charters
• Governance reviews and risk assessments

Whether you’re strengthening internal controls, preparing for investment, or navigating a governance challenge, we offer clear, pragmatic legal advice tailored to your organisation’s needs.

If you’re looking to enhance your governance arrangements or need support with board responsibilities, we’d be delighted to help. Our team combines legal rigour with commercial insight—ensuring your governance structures are not only compliant but effective.

Directors’ Duties: Legal Clarity for Responsible Leadership

Company directors in the UK shoulder significant legal responsibilities. Whether you’re leading a growing SME, sitting on the board of a family business, or advising a corporate group, understanding and complying with your duties is essential—not just for good governance, but to avoid personal liability.

Under the Companies Act 2006, directors are subject to seven core statutory duties, codifying long-standing common law and equitable principles

The Seven Statutory Duties

1. Act Within Powers (s171)
   Directors must act in accordance with the company’s constitution and only exercise powers for their proper purpose.
2. Promote the Success of the Company (s172)
   Decisions must be made in good faith to benefit the company and its members as a whole, considering factors like long-term impact, employee interests, business relationships, and environmental and community effects
3. Exercise Independent Judgment (s173)
   Directors must make decisions independently, even when representing shareholders or external interests.
4. Exercise Reasonable Care, Skill and Diligence (s174)
   This duty combines objective and subjective standards, reflecting both the role and the director’s personal experience
5. Avoid Conflicts of Interest (s175)
   Directors must avoid situations where personal interests could conflict with those of the company.
6. Not Accept Benefits from Third Parties (s176)
   Gifts or inducements that could compromise independence are prohibited.
7. Declare Interests in Transactions (s177)
   Any direct or indirect interest in a proposed transaction must be disclosed to the board

These duties apply not only to formally appointed directors but also to shadow directors and de facto directors, and some obligations continue even after a director leaves office

Why It Matters

Failure to comply can result in:

• Civil liability (e.g. compensation or return of profits)
• Disqualification from acting as a director
• Criminal penalties in serious cases (e.g. fraud or bribery)
• Reputational damage and shareholder disputes

Our Expertise

We advise directors across sectors on:

• Understanding and fulfilling statutory duties
• Navigating conflicts of interest and shareholder disputes
• Drafting and reviewing service agreements and indemnities
• Managing risks in insolvency, governance, and regulatory compliance
• Protecting directors through contractual safeguards

Whether you’re newly appointed or facing a complex governance challenge, we offer clear, pragmatic legal advice to help you lead with confidence and integrity.

If you’re a director seeking clarity on your legal obligations we’re here to help. Our team combines technical expertise with commercial insight to support responsible leadership and protect your position.

Shareholder Rights: Legal Protection for Your Investment and Influence

Shareholders are the lifeblood of any company. Whether you’re a majority owner, shaping strategic direction; or a minority investor wanting to safeguard your interests, understanding your rights is essential to protecting your position and ensuring fair treatment.

In the UK, shareholder rights are governed by the Companies Act 2006, the company’s Articles of Association, and any Shareholders’ Agreement in place. These frameworks provide a wide range of entitlements—from voting and information access to remedies in the event of unfair treatment

Key Shareholder Rights

Regardless of shareholding size, shareholders typically have the right to:

• Vote at general meetings (Companies Act, Section 284)
• Receive notice of meetings (Section 310)
• Inspect company registers and minutes (Sections 113, 116, 358)
• Receive share certificates (Section 769)
• Access directors’ service contracts (Section 229)
• Receive company accounts and reports (Sections 431–432)

Additional rights depend on the percentage of shares held:

• 5%+: Call a general meeting, circulate resolutions/statements
• 10%+: Request an audit of company accounts
• 25%+: Block special resolutions
• 50%+: Pass or block ordinary resolutions
• 75%+: Pass special resolutions (e.g. amend Articles, approve winding up)

Remedies for Shareholders

When rights are breached or interests are unfairly prejudiced, shareholders may seek legal remedies such as:

• Unfair Prejudice Petitions under Section 994 of the Companies Act 2006
• Derivative Actions to bring claims on behalf of the company
• Just and Equitable Winding Up under Section 122 of the Insolvency Act 1986

These remedies are particularly relevant in disputes involving exclusion from management, misuse of company funds, or oppressive conduct by majority shareholders.

Our Expertise

We advise shareholders—majority and minority—on all aspects of their rights and protections, including:

• Drafting and reviewing Shareholders’ Agreements
• Negotiating exits and buyouts
• Protecting minority interests in quasi-partnerships and family businesses

Our approach is strategic, commercial, and tailored to your goals—whether you’re asserting control, defending your position, or seeking a fair resolution.

If you’re a shareholder seeking clarity on your rights, facing a dispute, or considering a new agreement, we’d be delighted to help. Our team combines deep legal expertise with practical insight to protect your investment and support your influence.