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S110 Arrangement

An S110 Arrangement is a type of statutory demerger that allows a company to split its trade into two or more companies.

Are you and another shareholder having a dispute about the direction and focus of your company? Would you like to split certain company assets into a new company, to simplify regulatory obligations or improve viability?


An S110 Arrangement, formally referred to as a Section 110 De-Merger, is a type of demerger procedure for solvent companies, that allows a company to transfer some of its assets into another company, or several companies.

S110 Arrangements offer a range of benefits for companies and their shareholders, from advantages regarding tax, to simplifying disputes between shareholders over the direction of a company.


If you feel your business is in financial difficulty it is important to deal with it immediately. Call now on 0845 676 9033 for free confidential advice, or visit our contact us page.

Introduction to FRP

  • What is an S110 Arrangement?


    An S110 Arrangement is a type of statutory demerger that allows a company to split its trade into two or more companies. There are a variety of reasons for companies to use an S110 Arrangement to de-merge certain business assets.

    S110 Arrangements are most commonly used to de-merge companies that focus on several different activities. For example, a company that offers products and closely related services, may choose to de-merge into two different companies.

    This allows a company to better focus on a certain aspect of its trade, to develop one aspect of its business apart from others or to sell certain parts of the company to an outside acquirer.

    S110 Arrangements can also be used to settle disputes between shareholders over a company’s future. Shareholders can de-merge a company and split its activities into several different companies.

    In addition to the common reasons for the use of an S110 Arrangement listed above, there are numerous other situations in which directors and shareholders may opt to split the company or de-merge part of its assets to another company.


    Benefits of an S110 Arrangement

    There are several benefits to using an S110 Arrangement, as opposed a Members Voluntary Liquidation(MVL), if you have a viable company. While an MVL is used to extract cash from a company that’s no longer going to trade, an S110 allows a viable company to easily diversify.

    An S110 arrangement can be a convenient, tax-efficient option if your company is planning to sell parts of its business or certain business assets, without selling the entire company.

    Using an S110 arrangement, a company can also easily reorganise in order to sell unprofitable or unwanted business activities to a separate company, or to split its activities into several smaller companies with increased focus.


    In order to start the S110 de-merger process, at least 75% of shareholders need to vote in approval. The company also needs to be solvent, as proven by a Declaration of Solvency.



    Contact us to learn more about Section 110 Arrangements

    If you’re considering de-merging certain parts of your company, to improve focus on certain activities or splitting your company into two businesses to resolve a dispute between shareholders, an S110 arrangement could be a suitable choice.


    Our business recovery experts have provided advice and assistance to hundreds of UK companies. Contact us now to learn more about the S110 Arrangement process and discover if it’s a suitable option for your company.