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Why Does a Company Undergo Corporate Restructuring?

Corporate Restructuring

Corporate restructuring is the concept of reorganizing a company's internal structure for the sake of some purpose, such as greater profit or greater organizational control and efficiency. The internal structure which is modified in corporate restructuring could include the structure of the company in terms of ownership, as the actual ownership of the company might shift between different individuals to greater or lesser extents, or it could include the legal nature of the company.

For example, corporate restructuring might actually cover the shift from a partnership to a corporation, or vice versa. Corporate restructuring might also cover the shift from a partnership to a limited liability partnership.

Corporate restructuring, as mentioned above, might be performed by a company at any given time for the sake of a particular goal, but it might also be necessitated by other factors, such as a merger or demerger, or a buyout. Bankruptcy is also a common source of the need for corporate restructuring, as a company will likely have to perform corporate restructuring in order to make sure that it can best pay off its debts.

Corporate restructuring might sometimes involve modification of corporate identity, but not always. Corporate identity is the term most commonly assigned to a company's branding and logo and similar elements of a company.

Corporate identity exists to allow consumers outside of the company to easily and quickly identify that company. Sometimes, corporate restructuring might require a shift of corporate identity, such as when the name of the company changes as a result. But oftentimes, a company will choose to retain the same corporate identity even after corporate restructuring.

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