Have you thought about what would happen to your business if you or one of the partners or shareholders were to die or become seriously disabled?
If the future control of your business is important to you, and you want to ensure that your estate and dependents receive a fair price for your shares or business interest, an effective business plan involving Partnership/Shareholder Purchase Cover with a Buy/Sell Agreement is an absolute “must have”. This avoids consuming personal cash reserves, the sale of personal asserts or the need for a substantial loan. Is this an issue for your business?
The solution is Shareholder Protection Cover.
Partnership/Shareholder Purchase Cover and a Buy/Sell agreement can provide certainty about the future ownership of your business on the death or serious disablement of a partner or shareholder.
It can create the funds and mechanism for the sale and purchase of a business interest; help find a future owner or owners for the business; provide the means whereby an existing business owner can receive a fair price for his or her business interest.
Succession Plan Kicks into action
When Paul and John went into business together more than 20 years ago, they did not imagine that their combined talents would build a $2 million engineering business. As a specialists plastics engineer, Paul’s abilities were perfectly complemented by John’s ability to market and sell their products. As the business grew, they recognised the need for shareholder protection with a buy/sell agreement. Two years ago John, aged 52 at the time, arrived at work complaining of indigestion; three hours later he was dead.
His wife and children had no wish to join the engineering company, so Paul exercised the buy/sell agreement and bought them out with the funds generated by the Life Cover under the shareholder protection. With total control of the company, Paul was able to hire a sales and marketing manager to step into John’s shoes.