By putting Business Protection Insurance in place, you could make sure the business gets the funds to buy back the shares from a seriously ill partner or, in the unfortunate event of their premature death, the deceased’s estate. It’s a plan that everyone benefits from:
- The remaining partners keep control of their business
- The affected partner, or their estate, gets fair value for their share of the business
- Using an appropriate agreement, where applicable, can make sure any transactions are tax efficient
- The seriously ill partner or deceased partner’s estate receive a capital lump sum for the value of the shareholding
Shareholder Protection allows the shareholders of a limited company to provide funds to purchase the share of a deceased shareholder from their personal representatives. The life assurance contracts are effected by the shareholders personally. This ensures the surviving shareholders retain control of their business.
Corporate Shareholder Protection is an arrangement whereby the company agrees with each shareholder to buy back his shares from his personal representatives on death, with the insurance cost being borne by the company. This ensures security for the Company, and peace of mind for the family/dependents of the deceased.
So do the right thing for your partners, the business and yourself. Consult with We Finance and we will help you identify your individual and business insurance needs and guide you through the various types of insurance available to make sure you get the right cover in place.