What happens when a partner or shareholder dies or suffers a critical illness? Normally, the shares will be passed on to whoever inherits them under the will or intestacy. If this happens, the surviving owners might not have the capital to buy the shares back. The family of the partner or shareholder could become involved in running the business or they may need to sell the shares. Imagine what would happen if somebody who is unwilling or unable to run the business inherits it. Or worse, the person who inherited it sells the shares to a competitor. The surviving owners will lose full control of the business. Hence, it would spell disaster for the business. Therefore, every business should have a Shareholder or Partnership Cover in place.
The Shareholder or Partnership Cover provides a lump sum when a shareholder or business partner dies. It helps minimise the impact of the loss of a shareholder or business partner. The lump sum can help with cash flow and loss of profit. When a shareholder or business partner dies or becomes seriously ill, it will give the surviving partners the ability to buy the shares back. Therefore, it helps the surviving partners retain control of the company.
It is crucial to have a stable business plan. Take the necessary steps to secure the future of your business. Find out how we can help protect your business. Call us now or click on the ‘Get A Free Quote’ button below and we will get in touch with you.