This is a vital area for business owners to consider, whether they trade as a limited company or a partnership. Shareholder protection will ensure that control of the business remains with the surviving owners, rather than passing to someone who is unwilling or unable to contribute to the running of the business, while ensuring that the deceased’s beneficiaries are provided for. A life assurance policy is a relatively inexpensive method of providing the required funds needed to finance the purchase of the deceased’s interest.
As with other forms of protection we will work with you to ensure that the correct cover is put in place.
Firstly, we will consider the amount of cover that needs to be put in place; this may involve working with your accountant to place a value on the business. We will then consider the type of cover that should be put in place and source a suitable insurer.
Finally, we will provide you with advice on cross/double option agreements which give the surviving owners the option to purchase the deceased’s interest in the business, and to give the personal representatives of the deceased the option to sell to the surviving owners. If either party chooses to exercise their option, the agreement becomes binding.
At every step of the way we will consider the tax implications of our advice, both now - when premiums are paid and in the future in the event of a claim.
