Protecting the ownership of your business
Do You Have A Shareholder’s Agreement In Place?

The loss of an owner or a partner can cause numerous problems, but many people overlook the destabilising effect such a loss can have on the business itself. When an owner or partner dies, then their stake in the business is likely to pass directly to their family. If this was a majority shareholder, this could mean that the remaining owners lose control of some or all of the business and have to work with the spouse or child of a former owner. If you are a remaining shareholder, you might not want to end up in this position. In reality, the spouse or children of deceased shareholder would often much rather receive the value of the shareholding in cash and the remaining shareholders would prefer to be able to buy the shares from the family.

When do you need Share Protection?

It is always possible that whoever inherits a part of the business may choose to be a silent partner, but there is no guarantee of this. Some will want a more active role and may have very different ideas on what the firm should be doing. Another possibility is that the beneficiary may want to sell their stake. But if the remaining owners can’t find the funds to buy this shareholding, it could be sold to a competitor. Of course, the ideal solution is for the remaining owners to buy back the shares, giving the family a cash sum while ensuring they retain control of the business. The question is, will they be able to raise the funds to do this? This is where Share Protection insurance can help. It can usually be structured so that the business receives a tax deduction for the premiums. We can arrange a free review of your particular circumstances. Just let one of the team know that you would like to discuss further.

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