A Section 110 Demerger is a method used to divide up parts of an organisation that were previously under common ownership. In the UK there are different types of demergers in the UK. With a Section 110 Demerger, closing a holding company via a solvent liquidation is required.
The Insolvency Act 1986, Section 110 allows Liquidators to accept company shares in respect for assets transferred from the holding company. To at least 2 new limited companies that have been created exclusively to segregate and restructure a group arrangement.
What is a S110 Reconstruction?
A Section 110 reconstruction is the final part of a process in which 2 (or more) new companies are created to obtain the assets from the reorganised company.
The steps in a section 110 demerger/reconstruction typically include the below