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Partnership / Director Share Protection
Whether you are a director or a partner in your business, you may have invested a lot of time and money to grow that business. All the directors or partners involved in a business probably feel the same way and it is likely that you would want to protect the value of the business in the event of your death or ill health.
If four people aged 40 set up in business together it is likely that at least one of the partners will die or become seriously ill before they all reach retirement age of 65.
In the event of the death or serious ill health of one of your co-directors or partners, you not only lose their experience and expertise but you lose control of their shares in the business? Could you afford to buy their shares to retain control of the business? If not, these shares may pass to someone with little knowledge or interest in your business. They may also become a majority shareholder and decide to sell the company over your head.
In order to protect your business assets and avoid this situation arising, you should seriously consider your company¹s legal and financial arrangements.
Each director or partner can take out their own life assurance policy to cover an amount equivalent to their shareholding. These plans can be placed in trust and further supported by a written legal agreement known as a cross-option agreement. This gives the remaining directors or partners the right to buy the shares and the money to do it with, coupled with the option to sell being available to the new share holders.
At Willis and Company (Financial Services) we can help you assess the financial provisions you need to put in place to support prudent business protection. We can also help to explain what can often seem a complicated situation in a clear and easy to understand way.
If you would like further information on protecting your business assets, please contact the Willis Financial Services team on 028 9032 9042 or complete our enquiry form.