However, many companies are held back in their performance by structures that have grown over time and are, in some cases, outdated. Streamlining such structures can have a dual effect: it reduces costs while at the same time increasing efficiency – and thus competitiveness.
Particularly following corporate growth as a result of acquisitions or mergers, complex corporate structures often emerge. Maintaining these structures ties up resources, causes additional costs and impedes swift decision-making. Targeted optimisation and simplification of the corporate structure – referred to in English as Legal Entity Rationalisation and Simplification – can provide an effective remedy in this respect. The aim is to reduce corporate levels and entities in order to make the structures transparent and action-oriented again.
Such measures not only lead to cost savings, for example through the elimination of duplicate structures, reduced administrative effort and lower compliance costs. Communication channels and decision-making processes are also accelerated. Legal requirements can be met more easily, risks are minimised and tax benefits often arise – for example through suitable mergers or asset deals. Overall, an optimised structure strengthens the strategic flexibility and therefore the competitiveness of the company.
Any such project always begins with an analysis of the existing corporate structure. In this process, the individual entities, processes and costs are recorded, and possible risks as well as potential for improvement are identified. Subsequently, taking into account business, tax and legal considerations, a target structure is developed that fits the company’s business model and strategic orientation. Depending on the situation, mergers, asset deals or comparable restructurings may be considered for this purpose. Every measure must be based on a careful cost-benefit analysis – implementation should only take place if the expected benefit outweighs the effort involved.
The simplification and optimisation of corporate structures is an essential component of long-term competitiveness and sustainable corporate development. As the process is complex and touches upon numerous legal and tax aspects, early specialist advice is recommended. We would be pleased to support you in making your corporate structure fit for the future.