The sudden death of a shareholder in a private limited company can cause problems for both the surviving shareholders and the family of the deceased shareholder.
For example the surviving shareholders could lose control of the business as they may find themselves working with the deceased’s family. And as for the deceased’s family, they may be left with a share in a business, an illiquid asset but with little or no income.
Life assurance can provide a solution to these problems by providing liquid capital on the death of a shareholder to enable;
the surviving shareholders to retain control of the business as the deceased’s shares are bought back by the company, and
the family of the deceased shareholder to realise their shares for cash, shortly after death.
The solution outlined above can be achieved in one of two ways:
PERSONAL SHAREHOLDER PROTECTION
The shareholders enter into a personal legal agreement with each other to "buy out" a deceased shareholder's shares in the event of his death.
CORPORATE SHAREHOLDER PROTECTION
The company enters into a put / call legal agreement with each of its shareholders to buy back shares from their personal representatives in the event of death.
For more information please contact our main office.
Partnership Protection
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