Partnership & Shareholder Protection
The death or serious illness of a shareholding Director or Partner could have a devastating impact both on the future of your business and on your family.
Death or serious illness of a Shareholder or Partner can alter the balance of power within a company or partnership, thereby creating financial difficulties for
dependants and the business. Examples are:-
- Most shareholders leave their shares to their next of kin who will probably not have the necessary experience to assist in the running of the business. However, they could attend board meetings and would be able to exercise voting rights which may not be in the best interests of the company and surviving shareholders; OR
- On the other hand, they may wish to realise the value of the shares in cash. If the other shareholders have insufficient liquid capital reserves, they may be sold to a possibly hostile third party who could even be a direct competitor.
In the case of a partnership without adequate protection, the partnership may be dissolved unless stated otherwise in the partnership deed.
By being prudent, shareholders and partners can plan for the continuation of the business and protect their next of kin in the event of such circumstances.
Shareholder/Partnership Protection is designed to provide the cash funds for the surviving shareholders to purchase the shares of a dead or critically ill shareholder, and at the same time, ensuring the next of kin receives their cash entitlement without delay.
This is complex insurance which needs to be supported with Trusts and Cross Option Agreements. We have access to all the main Insurers who specialise in this type of cover, therefore enabling us to offer you independent expert advice.
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