Company restructuring is about reshaping your company and business so it can survive and thrive again. It’s a broad term that covers everything from renegotiating debts to cutting costs, refinancing or changing the way the business operates. The aim is always the same: to give the business a fighting chance of recovery.
Done properly, it can protect jobs, safeguard supplier relationships and stop debts from spiralling. It’s often used as a rescue technique and an alternative to liquidation.
What does company restructuring involve?
Company restructuring isn’t one single process. It’s a toolkit of strategies that can be used depending on the company’s position. Common approaches include:
Debt restructuring – renegotiating repayment terms with creditors, or consolidating loans into a more manageable plan.
Operational restructuring – reducing overheads, streamlining processes or closing unprofitable parts of the business.
Financial restructuring – raising new investment, refinancing existing debt or adjusting the company’s capital structure.
Leadership changes – bringing in new management or adjusting board responsibilities to steady the ship.In practice, company restructuring often blends several of these elements. The goal is always to get the business back to a point where it’s stable and sustainable.
When is restructuring an option?
Restructuring is something we consider for a client if:
- The business is under pressure but still has a viable core worth saving
- Cash flow is strained but new contracts or growth opportunities are on the horizon
- Creditors are supportive and willing to accept reduced or delayed repayments
- The problems are fixable. For example, a temporary sales dip or rising costs, rather than terminal decline
If the business is already insolvent with no path to recovery, liquidation may still be the most responsible option. But if there’s something to work with, restructuring can get a business back on track.
How formal restructuring works
Sometimes informal changes are enough, like tightening credit control, reducing costs or agreeing new terms with suppliers. But when debts are serious and creditor pressure is intense, a formal insolvency process might be needed. These include:
Company Voluntary Arrangement (CVA) – a legally binding deal with creditors to repay what the company can afford over time, while continuing to trade.
Administration – where a reputable licensed insolvency practitioner takes temporary control, with the aim of protecting the company from creditors while options to get back to profitability are explored.
Each has its own benefits and risks, and choosing the right path depends on the company’s financial health.
What about HMRC debts?
HMRC is often a key creditor to struggling businesses. The good news is that HMRC will usually engage constructively if you approach them early with a realistic plan.
Time to Pay arrangements, for example, can restructure debt and give you breathing space to spread tax repayments. In more serious cases, HMRC may support a CVA if it means they’ll recover more than through liquidation.
Benefits of company restructuring
Restructuring can deliver major advantages if your business is under pressure:
- It keeps the company trading, protecting jobs, contracts and relationships
- It buys time by stopping immediate creditor action and giving space to recover
- It improves sustainability, aligning costs and operations with reality
- It preserves reputation, and shows creditors and customers you’re acting responsibly
- It could avoid liquidation if it’s successful
What does restructuring mean for directors?
For directors, choosing one of the company restructuring options is a sign of acting responsibly. It shows you’re taking steps to protect creditors, rather than allowing debts to pile up unchecked. It also allows you to remain in control, rather than having a court or creditor force your hand.
Directors who act early are far more likely to find more than one company restructuring option available.
Restructuring vs liquidation
Company restructuring and liquidation are two insolvency solutions that have different initial aims:
Restructuring aims first to save the business, return it to profitability and pay creditors over time. If restructuring can’t deliver a turnaround, liquidation prevents further losses and lets you move on.
Liquidation is the process of closing the company and selling assets to pay off debt, most commonly through a Creditors’ Voluntary Liquidation (CVL). In some cases, it can be used to rescue the business by placing it under a new company structure — a process often known as phoenixing.
We’re here to help with company restructuring
Restructuring works best when problems are caught early. By seeking advice before things escalate, you’ll know whether restructuring could save your company and business. Our company restructuring experts will assess your business, explain whether restructuring is realistic, and set out your alternatives.
You don’t need to carry the weight alone. Call us today for free, confidential advice and take the first step towards resolving your company’s future.
