Shareholder Protection

The loss of a shareholding director following death, serious illness or permanent disability can have a serious effect, both on the future of a business itself and on their family.

Shareholder Protection allows a business to protect itself against the financial loss it may suffer from losing a major shareholder in any of these events.

Shareholder Protection is usually put in place to ensure that on the death of a Shareholder…

• Their shares in the Company are available for the other Shareholder(s) to buy
• There is sufficient cash available to buy their shares
• The above is done in a tax efficient manner.

Shareholder Protection ensures that the shares of a deceased shareholder are bought from the deceased estate/wife etc so they walk away with the true value of the shares, while the surviving shareholders then own the company between them.

This is normally carried out by:

• Effecting life insurance on each Shareholder to the value of their shares in the Company
• Putting these polices in trust so the payout is available to the remaining 
  Shareholder(s) without any tax implication
• Putting in place a 'cross option agreement' between the Shareholders so that if the options are exercised the holder of the shares must sell them and the other Shareholder(s) must buy them.

What to do now

+ Call us on 0800 018 3633

+ See what our clients say about us

+ Find out about company healthcare schemes