Shareholder buy/sell cover
Do you have an exit strategy? If you are in business, the single most important question you need to ask yourself is ‘how do I get out of it?’ If you have a business partner, this question should be your number one priority.
Your business may well be worth more than your house and is a big part of your estate or your family trust’s wealth. But, if you wanted to, could you convert this asset into cash quickly and easily, would you get what it is worth? You have probably spent years building it up, spent sleepless nights worrying about it, sacrificed holidays and family time and for what – to make money!
One day you will exit your business for one of four reasons, it’s guaranteed
2) Had enough
1 & 2 are straight forward enough as they are planned and the succession can be staged over a number of years. All you need is good planning and a good shareholder agreement.
3 & 4 are not so clear cut. If a shareholder died or became so disabled they could not work again, what would happen then?
Here you need a buy/sell agreement which clearly lays out what will happen, who will buy the shares, how much they will pay for them and how they will pay for them. It provides a ‘certain and predictable outcome’. Insurance is usually the most cost effective solution but any policies taken out must be correctly owned and be linked to the shareholder agreement.
Getting it right requires close cooperation between an insurance adviser, expert in this type of cover, and your accountant.
Should you wish to know more please simply complete the following form and we shall be in touch.