In the unfortunate event of a shareholder or business partner dying or suffering a critical illness there is often an agreement in place ensuring that the remaining shareholders or company partners have the option to purchase the shareholding, enabling the firm to continue trading.
Whilst this is a sensible step to take, will the remaining shareholders or business partners have enough money to buy the shares at short notice? Will they be able to borrow the money to do so?
Ownership protection cover can solve this problem by providing the necessary funds to purchase the shares. Therefore, control of the business remains in the right hands and the family is given fair value for the shares sold – all in a tax efficient manner.
