A membership organisation that supplied professional services to its members and to third parties had accumulated substantial investment funds. It decided that the investments should be realised and returned to the members and that the professional services operations should be transferred to a separate company owned by the organisation.
As the organisation was a company without share capital and limited by guarantee, it could not make any distributions to members. We assisted in restructuring the organisation to enable it to make a distribution to members and provide an appropriate structure for the future. The following steps were carried out:
- The professional services trade was transferred to a new company (A) established for the purpose and owned by the organisation
- The cash derived from selling the investments was distributed to members
- The business and assets remaining in the members organisation (including the shares in the professional services company) were transferred to another new company (B)
- The shares in B were then distributed to the members of the organisation.
The resulting structure leaves a limited company (B) with a share capital owned by members and this company has a subsidiary (A) carrying out the professional services work. This structure ensures that any future surpluses can readily be distributed to members.
