Losing a business partner unexpectedly can have highly adverse consequences for your business. You could be faced with any business loans being recalled immediately, not to mention the prospect of having to buy out the deceased partner’s estate. A suitably worded Partnership Agreement, in conjunction with life assurance and/or critical illness cover for the partners’ lives, will ensure peace of mind and protect the business, should the worst happen.
The death of a shareholder in a private company can cause considerable difficulties. Not unreasonably, the deceased shareholder’s beneficiaries may well want to realise the value of their inherited shares. However, funds may not be available to buy them out. In these circumstances, it is all too easy to find yourself with co-shareholders who may not contribute to the business, or who make life uncomfortable because of being encumbered with an unwanted shareholding. This can have a negative impact on the business. The solution is a suitably worded Shareholders’ Agreement in conjunction with life assurance, which provides funds to buy out the deceased shareholder’s beneficiaries to an agreed formula.
Most businesses insure their premises, vehicles or stock, but relatively few insure the people who are key to driving profits. The loss of a crucial member of your team could have unfavourable consequences for your business. You could be faced with any business loans being recalled immediately, loss of confidence and cancelled orders from customers. Time and cost is also involved in recruiting and training a replacement. Life assurance and/or critical illness cover is a simple and cost effective way of safeguarding the business, should a key employee pass away, or suffer a serious illness or accident.
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