Reasons to change business structure
Changing your business structure might be the appropriate next step following COVID-19 and the impact it has had. Following are potential reasons to change business structure:
- Economic downturn or downsizing: Downsize or simplify the business structure in response to economic changes.
- Change in management: Addition of a business partner might mean that you change the structure of your business to partnership from sole trader.
- Change in ownership: Acquiring a new business could mean that you need to change the structure to suit your needs.
- Financial reasons: Changing the structure might assist in meeting financial objectives and improve profitability of your business.
- Operational reasons: Internal functions and roles may have changed during this period and you may want to change the structure to reflect this.
- Business growth: Your business may have profited during this period or expanded into different areas, such as online forums, therefore requiring restructuring.
Remember that changing business structure has implications on the business’ tax and legal obligations. It may also have additional implications on your personal liability. You should take these into consideration before making changes.
What business structure suits your business?
An important decision to make before you start a business is what structure your business will run under. Click to read more.