The loss of a partner or a shareholding director can destabilise a business and quickly lead to financial difficulties. A partnership or director’s share protection agreement means that if the worst did happen, the remaining shareholding directors or partners can stay in control.
How it works
Each partner or shareholding director effects a life policy (or a life and critical illness policy if preferred) taken out on their own life.
These policies are then written in trust, with the partners or shareholding directors of the business as the beneficiaries. A written agreement will be required.
This means in the event of a claim the surviving partners or shareholding directors would have the funds from the policy proceeds to purchase the deceased’s partner’s or director’s share of the business. Along with the cross option agreement.
What this means for the business
What this means for the deceased partner/shareholding director’s dependants
They have a willing buyer and cash instead of a share in a business that they may have no interest in.
IQ can help arrange a suitable business protection trust to ensure that your business is safeguarded in the event of the worst happening. We can also arrange an appropriate life insurance plan to make sure that there are sufficient funds available for any remaining business owners to purchase the deceased’s share from his family.