changing structure

Question 1

Why might some incorporated or unincorporated businesses may change their structure?

Answer 1

Get extra funding from new shareholders by share issue (if they go public)
To grow their business - this is why it is important to have a clear vision
Due to pressure from other shareholders
They have reached a limit of shareholders or partners (eg. 20 in partnership or 50 in LTD)

Question 2

Why some incorporated or unincorporated businesses may be warned against changing their structure?

Answer 2

They have not sold enough shares (50,000 in LTD)
They could be subject to takeover (if PLC)
It is harder to manage staff (PLC split between shareholders and directors)
All financial information is public - maybe this could warn off new investors or make them a takeover target (see above)