Take steps to safeguard the future of your business
How would you feel if control of your company fell into the wrong hands – or a co-owner’s shares were sold to a competitor? You can prevent this from happening by taking out Shareholder or Partnership Protection alongside an appropriate legal agreement.
What is Shareholder or Partnership Protection?
Set up in line with the way your company is structured, Shareholder or Partnership Protection gives the shareholders of a limited company or the partners of a partnership or LLP (limited liability partnership) the ability to buy a deceased or seriously ill co-owner’s share of the business from them or their estate.
“Putting it another way, Shareholder or Partnership Protection is like having a will for your company or partnership, ensuring that both the personal and business-related values that you’ve worked hard for are protected.”
– Simon Claxton, financial services specialist at Macbeth
How Shareholder or Partnership Protection works
With Shareholder or Partnership Protection, it isn’t just a question of setting up an insurance policy. At Macbeth we can advise you on the right approach for your business, looking at whether your cover should be written in trust or if you should consider taking out ‘life of another’ policies.
If you don’t want to run the risk of losing control of your business, it’s worth considering Shareholder or Partnership Protection.
- Lump sum payment - Shareholder or Partnership Protection provides the capital to buy a deceased or critically ill person’s share of the business, avoiding potential disruption to the services you offer
- Tailored cover – your policy can cover a range of scenarios, from death and terminal illness to permanent disability and critical illness
- Written in trust – if a business has more than two owners, the cover is usually written in trust
- Life of another – if there are only two owners – or the owners are closely related – it may be better to take out policies on a ‘life of another’ basis
Shareholder Protection gives you peace of mind that you’ll have the funds to buy out a deceased or seriously ill co-owner without delay.
Why you should consider Shareholder or Partnership Protection
- Shareholder or Partnership Protection ensures that control of a business remains with the surviving owners, rather than passing to someone who is unwilling or unable to run it. It also prevents the sale of shares to a competitor.
- This type of business insurance saves you having to raise finance to buy out a deceased or seriously ill co-owner – and gives you peace of mind that you’ll have the funds to make the purchase without delay.
- A lot of business owners aren’t aware of Shareholder or Partnership Protection, but many businesses can benefit from having this type of cover in place.
- Shareholder or Partnership Protection should always be considered when you’re writing a new, or revising an existing, shareholder or partnership agreement, which every limited company or partnership should have.
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"We used Simon because we needed not only general advice relating to what insurance protection was available but also because he could then specifically tailor this advice to our precise business and personal needs. We found his detailed knowledge and clear explanations of the various products invaluable in assessing exactly what we needed to move forward with confidence."