When a growing business hit a wall, the culprit wasn’t a lack of clients. It was their corporate structure. In this case study, you’ll see how BridgePoint Group untangled the problem with a strategic corporate restructure that unlocked growth and boosted tax efficiency.
Company Profile
We worked with a company in the construction sector based in Sydney. With 150 employees and an annual turnover of $40 million, it stands as a market leader in its niche. Over the years, the company traded profitably and built significant retained earnings.
The Situation
The client had relied on the same accounting firm since its start. While this relationship worked in the early years, the company’s growth outpaced the advisor’s capacity.
The owners realised they needed expert strategic guidance on their corporate structure.
When we reviewed their setup, we found a single trading entity owned directly by the shareholders. This structure was no longer fit for purpose due to the company’s scale and asset value.
Read: Business Growth Without the BS.
We identified three key risks:
- Asset exposure: Over $10 million in retained earnings was held in the trading entity, exposed to potential creditor claims.
- No structural separation: Operational and asset risks were concentrated in one entity with no safeguards.
- Industry-specific risk: The construction industry requires strong balance sheets for contracts. However, holding all assets in one entity increased vulnerability.
Our Approach
We began with a detailed analysis of the shareholding, operational setup, and balance sheet. Our goal was to enhance asset protection while managing tax outcomes.
The solution was a corporate restructure using a “top-hatting” method—adding a holding company above the trading entity.
We took the following steps:
- Prepared formal advice outlining risks, the new corporate structure, and a step-by-step implementation plan.
- Applied relevant tax exemptions to avoid adverse impacts on shareholders.
- Aligned stakeholders:
- Met with the managing director to present our proposal.
- Held a meeting with all four shareholders to explain benefits and confirm no tax downsides.
- Worked with each shareholder’s accountant for independent validation.
- Implemented the restructure, including company setup, share transfers, and moving $10M+ into a safer structure.
The Outcome
The corporate restructure moved over $10 million in retained earnings out of operational risk. The funds are now protected within the holding company while keeping the balance sheet strong for industry contracts.
We achieved this without any adverse tax effects for the company or its shareholders.
Read: Why Getting the Corporate Structure Right Can Be a Game Changer for Your Business
Key Learnings for Business Owners
- Your corporate structure should evolve with growth: Early-stage setups rarely suit large, complex businesses.
- Asset protection is essential: Like insurance, structuring safeguards financial assets from operational threats.
- Plan for tax efficiency: A well-designed corporate restructure can protect assets without unnecessary tax costs.
- Consider industry context: Certain sectors, like construction, have unique balance sheet and risk management needs.
Your corporate structure isn’t something you can just “set and forget.” It’s a vital part of your business that should evolve as your needs change. Regular reviews ensure that your structure continues to provide the asset protection, risk management, tax efficiency, and investment appeal that your business requires.
A structure that once gave you everything you need may not be right for you anymore. Reach out to us to take a fresh look. It might just save your bacon.
