Shareholder Protection Planning
Shareholder Protection Planning
As a business owner, it is crucial to ensure that your company is protected in the event of the death or critical illness of a shareholder.
What is Shareholder Protection Planning?
Shareholder Protection Planning is a type of insurance that provides financial protection to the business and surviving shareholders in the event of the death or critical illness of a shareholder. It ensures that the remaining shareholders can purchase the deceased or critically ill shareholder’s shares, allowing them to retain control of the business.
Benefits
- Business Continuity: Shareholder Protection Planning ensures business continuity in the event of the death or critical illness of a shareholder.
- Control: Shareholder Protection Planning allows the remaining shareholders to retain control of the business by purchasing the deceased or critically ill shareholder’s shares.
- Financial Protection: Shareholder Protection Planning ensures the business, surviving shareholders and the family of the deceased shareholder are financial protected during a challenging time.
- Tax Benefits: Shareholder Protection Planning offers several tax benefits, including tax relief on premiums and no tax liability on the lump sum payment.
Why do you need Planning?
As a business owner, it is essential to plan for the unexpected. The death or critical illness of a shareholder can have a severe impact on the company’s operations, financial stability, and ownership structure. Shareholder Protection Planning ensures that the remaining shareholders can purchase the deceased or critically ill shareholder’s shares, allowing them to retain control of the business. It also provides financial protection to the family of the deceased or critically ill shareholder during a challenging time.
How does it work work?
The policy is taken out by the business, and the premiums are paid by the company. In the event of the death or critical illness of a shareholder, the policy pays out a lump sum of money to the remaining shareholders, which can be used to purchase the deceased or critically ill shareholder’s shares. This allows the remaining shareholders to retain control of the business and provides financial protection to the company, surviving shareholders and family of the affected shareholder.
If you are interested in learning more about Shareholder Protection Planning and how they can benefit your business, please contact the SMH Financial Services team on info@smh.group or 0114 266 4432.
Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.