Reeves Butchers supplies quality meat, poultry and game to the catering industry and has been built up over the past 25 years by the owner manager and his management team.
We’d worked with Reeves to improve their management information and improve their view of the business. While talking to the owner, we spotted an opportunity to ring-fence the property assets of the company and provide some long-term security and safety for the business at large.
Before: the original issue faced by the client
Reeves had grown organically over the past two decades and now owned the commercial premises that their factory and offices are based in. At the time, this property was owned directly through their main limited company, something that could – in the worst-case scenario of business failure – be a potential issue for the owner and the business.
The key issues with this situation were:
- The property was an asset of the company
as it was legally owned through the limited company and would appear under their assets on their balance sheet.
- This put the property at risk
so if the company should ever go into liquidation, this real estate would have become an asset that could be sold off to pay creditors.
- A solution was needed to reduce this risk
which meant our team creating a resolution that would remove ownership of the property from the main limited company.
After: how FLB provided a workable solution
For Reeves, buying their business premises was a far more cost-effective option than renting. When you’ve worked hard to purchase a property, the last thing you want is for creditors to have a claim over these premises. Our solution to this potential business risk was to ring-fence the properties and, by doing so, move ownership outside of the limited company.
To successfully ring-fence these assets we:
- Created a holding company
which is in Reeves’ name and linked to their limited company, but with the assets sitting outside of the main business structure.
- Transferred ownership over to the holding company
with the property wholly owned and mortgaged through this holding company.
- Removed the potential risk
by ring-fencing the properties through the holding company and putting them outside of the scope of any potential creditors.
Safeguarding the future of the business
By ring-fencing their property assets, Reeves has made their business more secure. We’ve helped them to safeguard their future and reduce the potential risk. It also puts the owner in a good position if he should ever look to dispose of the business, making the company a more attractive and safe option to any potential buyers or investors.
If your business owns property, office space or business premises, talk to us about how these assets could be ring-fenced and your risk reduced.