The death or serious illness of a shareholder or partner can alter the balance of power within a company or partnership, and can create financial worries for dependants of shareholders and partners. For example:
• Where a main shareholder dies, the surviving shareholders can face the prospect of new and possibly unwelcome persons taking over.
• The bank may call in debt which could have serious implications for those remaining in the business.
• Dependants of a deceased minority shareholder may have difficulty realising the full value of the shareholding.
• Where a partner dies, the partnership may be dissolved unless stated otherwise in the partnership deed.
If you are a business owner, the financial security of your dependants could be very dependent on receiving fair value for your shareholding/partnership interest. You are often best to agree such terms with your co-directors/partners before any major set backs.
Statistics show that 1 in 4 people will suffer a critical illness before they reach age 65. It is therefore essential that all shareholders and partners plan for the continuation of business if the worst should happen. Our team at Perredon are here to help and advise at every level so that you can feel safe in the knowledge that you have made some provision against these contingencies.