We can offer help and advice with the following key areas of your business's financial planning.

Directors Share Protection, Partnership Protection, Key Person Insurance, Protection against Financial Liabilities, and Retirement Planning.

Directors Share Protection/Partnership Protection.

Our aim is to help you maintain continuity of ownership should a director or partner die or become critically ill.

We can help you determine what the articles of association or partnership agreement states relating to the distribution of shares in case of death or critical illness of a shareholder or partner.

Implications of lack of planning?

In case of passage of share to a family member. They could become a director or partner, even if they know nothing about the business. They could sell the shares to an unsuitable person / business affecting the position of the remaining shareholders. They could make a call on the value of the shares putting financial stress upon the business.

The remaining shareholders may have insufficient funds to purchase the shares. Unskilled directors could affect the stability of the company impacting upon customer or bank confidence. Borrowing funds to buy the shares could have the same effect.

The remaining shareholders may have to admit other shareholders to buy the shares. The deceased could have a number of beneficiaries causing the shareholding to become fragmented.

If there is an existing plan in place the agreement may be unsuitable giving rise to an Inheritance Tax liability in case of a claim. Existing plans may no longer be sufficient or represent good value as premiums for life cover generally have decreased in recent years.


BUSINESS PROTECTION ENQUIRY FORM

Key Person Insurance

Our aim is to maintain your company’s strength in case of death or diagnosis of a specified critical illness of a “Key” employee, i.e. an individual that has a direct impact upon the operating success of the business.

We can help to determine who if anyone is responsible for major contributions to profit. Determine if there are any existing plans in place and evaluate the suitability of these plans in terms of amount, cost and how the policies are written.

Determine if existing plans have been declared to H M Revenue & Customs and, if they qualify for tax relief. If the plans qualify for tax relief (even if not claimed) on distribution of the sum assured this would be treated as a trading receipt significantly reducing the value of the benefit. 

Without planning a potential financial loss or impact upon turnover, gross or net profit can be the result. High recruitment cost and potential added salary could also result if the keyman is a business owner. If this is the case the company would have to pay the true market value for the position the keyman. A potential loss during the time it takes to find a suitable replacement.


KEYMAN PROTECTION ENQUIRY FORM

Protection against Financial Liabilities

Our aims are to ensure repayment of business debt in case of death or diagnosis of a specified critical illness of a business owner.

Examples of business liability, include Mortgages, Loans, Overdrafts, Directors Loan Accounts, Partnership Capital Accounts, etc.

Implications of lack of planning?

Should lenders feel the viability of the business has been diminished by the death of a business owner it could affect the potential of the business to continue with existing borrowing or it’s potential to borrow in the future.

In the case of directors loan accounts and partnership capital accounts the debt will pass from the business owner to his/her estate who may wish to call upon that debt immediately causing the business to pay funds reducing the ability to further the business, or, to borrow funds from other lenders at higher interest rates than would have normally have been sought by the business owner (if any).


LIABILITY PROTECTION ENQUIRY FORM