Share Holder Protection

The surviving owners will probably want to buy the deceased’s share and keep control of the business. However, the harsh reality is that many won’t have access to the required funds to cover any buy out.

Should the surviving partners be unable to source the required funds, the following could happen;

• The deceased’s estate could force a sale or, worse still, the winding up of the business
• Family members could become involved in the running of the business
• Banks and creditors may want to renegotiate terms or call in loans
• The introduction of an unsuitable buyer, potentially a competitor or rival

Consider the position your spouse and dependants would be left in, should the worst happen to you. Assuming they have no desire to be involved in the day to day running of the company, ensuring they receive a fair price for your shares would go a long way to safeguarding their future.

A clean break is often the desired route, but this is only possible if the correct solution has been put in place.

Shareholder protection provides peace of mind for the remaining directors should one of them pass away and financial compensation for the deceased’s family, in the form of a lump sum pay-out in exchange for their shares.In addition, should a shareholder become seriously ill, critical illness cover ensures a lump sum is paid out to the individual who is suffering.