What is Shareholder & Partnership Protection?
Often, within a Business, there can be a few owners who are not related to each other. With this in mind, these owners have their own family who they plan to provide for, after their death. Shareholder Protection not only protects the Business but indirectly, these family members. Following the death of a Shareholder, a number of things could happen. One common scenario is that the family who have lost their loved one will want to receive the value of the shares, as opposed to the shares themselves. Having a suitable Protection policy, that was taken out on the life of the shareholder, means there is sufficient funds available to pay the family and purchase the shares.
Why should Shareholder & Partnership Protection be considered by the Business?
- The surviving shareholders do not have to find the funds to pay the deceased shareholder’s family.
- The surviving shareholders retain control over their own company and will not “inherit” a sleeping partner.
- The family will not feel forced to sell the shares to an unknown third party.
What else do I need to know?
- Limited Company, Limited Liability Partnership (LLP) and Scottish partnerships are eligible to take out Shareholder Protection.
- There are different ways in which policies can be arranged which we can discuss with you.
- Polices can be set up to include Critical Illness cover.
- We can discuss the potential tax implications associated with this type of cover however strongly recommend you seek independent tax advice.