Are you a shareholder in a business?

We all know that we should plan ahead and ensure our financial affairs are in order so that if the worst were to happen our loved ones wouldn’t have to worry, but you might forget about your business. The lack of a will, funeral costs and inheritance tax issues could cause a lot of stress at a difficult time, but being faced with running a business you know nothing about could be a scary prospect.

Usually any shareholding would pass to your estate and therefore on to your beneficiaries. So by default your beneficiaries suddenly have responsibility for a business that they perhaps know very little about. It might be that they would rather liquidate this interest and have a cash payment instead but would the business have the funds to make this happen?

The answer could be to make sure that shareholder protection, or share protection as it’s also referred to, is put in place. It’s in the business’ interest to have a clear plan of what would happen if a shareholder dies and this should be written into the relevant legal documentation. Taking out shareholder protection insurance to cover all shareholders then means that the company would have the financial resources to buy back the deceased’s stake, ensuring the stability and continuity of the business, as well as a smooth settlement for the deceased’s beneficiaries.

If this is something you think your business should consider we would be happy to talk you about how shareholder protection could help you. We can also cover off any personal financial planning matters such as personal life insurance or critical illness cover, inheritance tax planning or income protection to help give you full piece of mind. (