What is Share Purchase Insurance?
Have any questions about how this can apply to you?
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If your business loses an owner through death, disability or major illness you usually need to address:
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control of the business for the remaining owners; and
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certainty for the departing owner (or their estate) for the sale of their shareholding.
We recommend suitable cover to provide adequate funding for a properly constituted Buy Sell agreement among shareholders.
The remaining owners need to retain control and the departing owner needs to know what value they will get for their shares.
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An agreed value for the shares fully funded by insurance to ensure a certain and predictable outcome and a "win - win" solution for all parties;
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"Agreed value" clauses in buy sell agreements. These can be set annually when accounts done and will lessen potential arguments over the "correct" value of the shares;
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A mandatory rather than optional agreement to buy the shares in the event of death, total and permanent disability or major trauma; and
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Ownership of such policies by an independent Trustee or Trustees.