Resources

General Resources and FAQs

Definitions

Legal Entity Rationalization and Legal Entity Simplification are interchangeable terms used to describe projects (“LER Projects”) that review and evaluate legal entities that make up a company’s corporate structure with the goal of merging, liquidating, realigning or eliminating unnecessary entities.

Pull-Forward Benefits is a term used to describe accelerating the cost and efficiency gains realized from the completion of your LER Project by eliminating the execution period.

Approaches to LER Projects

The Dormant First approach focuses on eliminating inactive entities. Minimal analysis and due diligence in the planning phase makes it possible to begin implementation quickly, but it can be difficult to achieve significant reductions in excess costs and risks with this approach.

Planning Phase – Short
Potential Reduction in Excess Costs and Risk Reduction – Low

The Outside-In approach focuses on individual entities to either be eliminated, realigned in the structure or merged with an existing legal entity. This approach is often referred to as the “jig saw” since you work from the edges of the legal structure and move to the interior; alternatively, it sometimes is referred to as “ad hoc” because it is inherently a trial-and-error approach.

Planning Phase – Medium
Potential Reduction in Excess Costs and Risk Reduction – Medium

The Straw Man/Whiteboard approach is a more holistic exercise that starts with the abstract and then moves on to what can be achieved from a practical perspective. The first step is to create the optimal legal structure as if the business had the ability to “start fresh” from day one. This process allows the business to identify the unique business needs that influence key structuring decisions.

Planning Phase – Long
Potential Reduction in Excess Costs and Risk Reduction – High

FAQs

Q – How is the iSPAC different from existing products or services on the market today?

A – The iSPAC is the only product on the market today that transfers legal ownership of your unneeded entities and leaves you with a definitive exit.

Q – Will GES work with clients during the Planning and Due Diligence phases of their projects?

A – Yes, GES will work with you and your existing advisors during the Planning/Due Diligence phases to help determine if the iSPAC is right for you.

Q – Does GES provide Planning/Due Diligence services for legal entity simplification projects?

A – No, GES does not provide Planning or Due Diligence services to clients. However, we are happy to discuss your fact pattern and provide you recommendations on service providers that we believe would be appropriate for your project.

Q – Is there a minimum or maximum project size for the iSPAC?

A – GES will consider inquiries for projects of all sizes.

Q – What financial benefits can I expect to realize when using the iSPAC?

A – Clients using the iSPAC can expect to dispose of their legal entities at a lower cost than proceeding on their own. Additionally, accelerating the completion of your LER Project allows for cost reductions and efficiency gains to be “pulled-forward” resulting in additional savings.

Q – Where can I find out more about iSPAC?

A – You can download an extensive overview here.