Legal Entity Rationalization Services

Streamline structure, maximize efficiency

In today's dynamic business landscape, organizations have an opportunity to optimize their tax, legal, and operating structures. Multiple factors (e.g., deals, cash pressures, tax law complexities, ERP upgrades or implementations) create the perfect environment for reorganizing operations, containing cash expenditures, and improving tax positions.

Recognizing the impact of Legal Entity Rationalization (LER) projects on various functions and processes, KPMG LLP (KPMG) has developed an operationally aware approach to assist in executing LER projects. Our approach helps enable organizations to plan and implement a new, sustainable, and more efficient entity structure that unlocks tangible and intangible benefits. By reducing costs, realizing potential tax benefits, and aligning the entity structure with the business approach, organizations can achieve significant direct and indirect savings.

LER services offered by KPMG help companies rationalize their legal entities, leading to the redeployment of resources to higher value-add activities and better alignment of organizational structure with the business approach. This process serves as a cornerstone for business transformation, evaluating the current corporate structure's cost-value ratio and developing a clear plan to reduce excessive organizational structure without disrupting ongoing operations.

Reshaping success: Unlocking your organization's potential

Simplify complexity and tap into the untapped potential within your organization. Our strategic approach helps companies assess and optimize their structures, resulting in significant direct and indirect savings.

With meticulous risk management, established leading practices, and a phased approach, our LER projects empower companies to achieve the following:

Increase Efficiency and Reduce Overhead: Streamline operations and consolidate entities to enhance efficiency and reduce unnecessary costs.

Mitigate Risks: Implement a thorough risk management strategy to minimize disruptions and help ensure a smooth transition throughout the rationalization process.

Enhance Operational Readiness and Efficiencies: Identify and eliminate nonessential entities, consolidate acquired entities, and establish critical paths and interdependencies for improved operational readiness.

Gain Transparency and Governance: Obtain greater visibility into financial reporting environments and establish a robust governance structure for enhanced control and compliance.

Unlock Tax Planning Opportunities: Identify potential tax planning opportunities and reduce costs associated with tax filings.

Identify Value Creation and Synergies: Uncover value creation opportunities and synergies within your organization to drive growth and help maximize performance.

Align with Operational Strategy: Enhance alignment with your operational strategy to help gain leadership buy-in for a successful transformation.

Organizational strategy

Aligning the legal entity structure with the business approach enables organizations to design a future state that accurately reflects their needs.

Governance

KPMG provides guidance on legal entity governance frameworks, policies, and procedures for opening, maintaining, and closing legal entities.

Legal entity elimination and simplification

KPMG works closely with organizations to develop guiding principles for eliminating entities and creating simplified legal entity profiles. This process identifies potential opportunities associated with each eliminated entity while considering time and budgetary constraints.

Implementation

LER projects impact various business functions, including finance, tax, legal, and treasury processes. Clear articulation and agreement on the desired end state by functional leaders are crucial for successful implementation.

In addition to these components, KPMG offers top considerations for legal operational readiness in legal entity reorganizations, including tax planning, legal entity structure, IT systems setup, funding and working capital, employee transition and alignment, asset transfer pricing, regulatory authorizations, and vendor management.

Dive into our thinking:

Legal Entity Rationalization Services

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Cutting-edge tools and solutions for reshaping organizational structure

KPMG offers powerful software tools such as KPMG Legal Entity Manager for modeling complex entity structures and managing data, and the KPMG State Tax Analysis and Restructuring Tool for identifying cost reductions. KPMG provides an innovative approach tailored to clients' needs, while the KPMG Legal Entity Reduction Delivery Platform automates project processes for efficient delivery and real-time access to information. With KPMG's cross-functional teams, organizations gain in-depth skills, experience, and an unbiased approach to reshape their structure for sustainable business success.

Reshaping success starts with simplifying your organizational structure. Let our LER services be your catalyst for transformation, enabling you to increase efficiency, reduce costs, and achieve sustainable success.