Business Protection and Succession Planning
On death, the shares of a deceased director form part of their estate. Those who inherit the shares may not want to get involved in the business or conversely the surviving shareholders may not want the next of kin to come into the business. The most feasible option is to sell shares back to the surviving shareholders. This would require the shareholders to produce a substantial lump sum.
The solution is business protection – an arrangement can be put in place whereby on the death of a shareholder, funds become available to buy shares back from the next of kin. There are a number of different ways businesses can protect themselves in the loss of a partner, director, or key person to their business.
•Personal Shareholder Protection
•Corporate Shareholder Protection
•Key Person Insurance
At Southeast Financial Services we ensure the most efficient and productive agreements are put in place by involving your accountant and legal advisor; ensuring nothing is left to chance. It is important to review these arrangements annually as the business grows.
Keyperson Insurance – Insures Some of your Biggest Businesses Risks and is one of the most overlooked and most important insurances in business. You might have public liability insurance and you insure your buildings, stock and vehicles, professional indemnity insurance and legal cost insurance.
What about your other Primary Assets – Your key staff?
Whilst these are all very sensible precautions, we can sometimes neglect to protect our most valuable business assets: the men and women whose talent, experience and judgement contribute substantially to the financial health of the organization. These key staff represent the heart of every businesses especially small or family run businesses. Prolonged absence through serious illness or even death can result in big losses or even closure.
Keyperson Insurance is a must. It can’t replace people but it can provide cash to buy time and cover the costs of temporary staff, recruitment or loss of profits.
Who Are Your Key People?
A keyperson is anyone who the company depends on for its continued success, relies on their specialised skills, reputation and contacts and whose death would have serious consequences for your company.
Insurance to Protect Your Business
Many businesses will not have employees with the same knowledge, experience, judgement and reputation as the deceased employee. Sourcing an external candidate and in particular, the recruitment and training process can be slow and expensive.
Insurance to Protect Your Profits
The effect of losing key staff goes well beyond simply the cost of their salaries and the cost of replacement. As they’re central to your businesses, their loss will knock on to the bottom line. You can insure for loss of profits too!
Protect Shareholders or Partners
Here we are talking about insurance to protect interests in the event of long-term illness or death. Families may want to sell their stake in the business but the remaining members in the business may not be able to afford to purchase but do not want those stakes held by newcomers
Those Who Provide Personal Guarantees
When a business takes out a loan or raises finance the lender is quite likely to require a personal guarantee or a charge on their personal property. This especially applies to small and new businesses. So what happens if these guarantors become seriously ill or die? The lenders may well be in a position to call in the loan. What happens then? Insurance can be put in place to pay-off the loan and free the business and the guarantor’s family
Critical Illness / serious Illness
• Any death benefits can be coupled with serious illness benefits
• Protection for the business if one of the key players suffers a serious accident or illness
Executive/Group Income Protection
A tax efficient way of taking care of key employees.
If one of your most valued employees was to suffer a long term illness, injury or accident, you’d like to think that they’d be financial secure. Executive Income protection is a valuable benefit to the Employee. They have the peace of mind in knowing that they will be financially secure in the event of long term illness. For the Employer, it is an excellent benefit to be able to provide such Employees. After a defined deferral period (e.g. 4,8,12 or 26 weeks) he policy can pay up to a maximum of 75% of an Employees pre-disability income, less social welfare entitlements.
Employers have the peace of mind also that they are no longer under the moral or financial pressure to continue to pay an Employees wages indefinitely, which can be a huge drain on finances.
If you are happy with our service, we would be delighted to continue our relationship with you, in other areas of your important money matters such as, financial planning, Mortgage advice, Investment/Saving, retirement planning and personal protection, please browse these links for more information.