United Kingdom


  • Service: Advisory
  • Type: Business and industry issue
  • Date: 27/10/2010

Legal Entity Rationalisation (LER) 

We help clients implement an optimised legal entity structure more aligned with the business by reducing the number of legal entities and reorganising the legal entities in the group structure so as to obtain significant cost savings and/or simplification benefits.

What's on your mind?


  • Your legal entity structure is unnecessarily large and overly complex with no logical structure
  • The legal entities are difficult to manage and control
  • You need a strategic vision for your legal entity structure
  • You are not confident in the accuracy of your group structure and whether it is complete
  • You are unsure as to the purpose of some of your legal entities
  • Your group structure is causing unnecessary compliance costs and taking key managerial time away from value-added business activities
  • You have tried to carry out an LER internally and your key internal stakeholders disagree over the optimal structure and which entities can be candidates for elimination  


Bringing you peace of mind


  • We can guide you through your LER project using a phased approach that is designed for your group:
  • Help you think through how your structure could better support your future business needs
  • Suggest a legal entity structure more closely aligned with the business
  • Challenge the 'reason for being' of each legal entity and ensure reasons are valid
  • Use LER tracking tools to capture cross-functional issues and control the resolution/clearance of the issues
  • Preparing a steps plan for implementation including accounting, tax, legal, regulatory issues etc.
  • Legal due diligence and preparation of documentation for business and shareholding transfers
  • Advise on methods of elimination and ultimately liquidate the surplus entities
  • We can also help you with the business case, including a cost benefit analysis, if necessary to support the project
  • Overall, we will bring our experience of previous LER projects, suggest guiding principles that should be applied, point out the pitfalls to avoid and the important areas to focus upon.


What's in it for you?


  • Cost savings, both direct savings such as lower compliance costs (finance/tax/legal/regulatory)  and indirect savings from a reduction in back-office activities
  • Intangible benefits derived from freeing up more time to focus on value-add business activities
  • Reduced risk for the group which running many legal entities inherently brings
  • More efficient dividend flow with fewer tiers of companies
  • A smaller, simpler legal entity structure which is more aligned to the business



  • We have a significant track record of advising on successful multi-national and UK LER projects and our clients frequently tell us we are user-friendly, commercial and provide practical solutions
  • We have a core team of LER professionals including process/project management, legal services and liquidation services, as well as other subject matter experts which we bring in when required, so we provide a complete LER service offering
  • We have a flexible approach, and can provide as much or as little support as needed, including providing resources and/or managing the process


Andrew MilnerAndrew Milner


KPMG in the UK


0207 311 4131

Email Andrew