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.