If the worst should happen, is your business protected?

 

A shareholder agreement will ensure business stability, continuity and financial security for private limited companies if a shareholder should die.

 

Without it, the shares may pass on to the deceased shareholder’s family who might prefer a cash sum. In other circumstances, shares can even fall into the hands of your competition.

 

Shareholder protection gives the remaining business directors or shareholders the ability to buy the shares in question.

 

This is usually done by taking out a life insurance policy for each director to the value of their shares before placing these policies in trust so that any payout is available to the remaining shareholders with no tax implication.

 

At the Independent Asset Management Company we can also set up a cross option agreement between the shareholders so that if one director wishes to sell, the option to purchase belongs to the other directors.