Shareholder Protection

If a shareholder in your private limited company, a member of your Limited Liability Partnership (LLP) or a partner in your partnership were to die, could you afford to purchase their share of the business? If not, there could be significant implications for the future of your business. Shareholder protection can help you protect the ownership of your business in this scenario.

If a business owner dies or is diagnosed with a terminal illness (if life expectancy is less than 12 months) or is diagnosed with a specified critical illness (if selected), a Shareholder Protection Policy can provide a lump sum to the remaining business owners. This could enable the surviving owners to purchase the deceased owner’s share of the business from their estate.

If a business owner dies with no share protection in place, their share in the business may be passed onto their family. The surviving business owners could then lose control of a proportion of the business. The deceased owner’s family may choose to become involved in the ongoing running of the business or could even sell their share to a competitor.

By putting Shareholder Protection in place, you can stay in control of the business by preventing the shareholding from being inherited by an unwanted beneficiary and so reduce disruption at a challenging time for your business.

Don’t forget, our professional friendly advisors are on hand to support you and can help you explore all of your options.