SUCCESSION PLANNING

Protecting your greatest assets

As the business owner, you and the people in your team are your greatest assets. After all, without you and the people who drive it forward, the business wouldn’t exist. So considering how to protect yourself and your team against unforeseen circumstances is a vital part of ensuring your ongoing success.  For example:

  • How would you cope if you lost a business partner or anyone who’s key to the success of your business, as a result of ill health or premature death ?

 

  • What impact would this have on your business, your customers and your profits ?

 

  • How would this affect you personally ?  

 

Carefully considered succession planning can protect your business, profits and financial well-being by putting the right money in the right hands at the right time. 

Shareholder Protection

When a shareholder or partner in a business dies, their share of the business forms part of the estate and passes to their beneficiaries. This could disrupt the future control, direction and day to day running of the business, ultimately affecting its ability to continue trading. Succession planning provides protection against this risk and ensures the smooth transfer of ownership to the surviving business owner(s) by giving them the legal right as well as the funding to purchase that share of the business. 

 

Key Person Insurance

The loss of anyone who makes a significant contribution to the profits of a business due to ill health or death can seriously affect the business financially.  Key person insurance pays out a benefit that’s equivalent to the contribution to profits that the key person would have made, This can protect the business from disruption and financial loss whilst affording some time for a suitable replacement member of the team to be hired.

 

Business Loan Protection

In the event of the death of a business owner (or a key person within the business) who has guaranteed a loan, the bank lender may request that the loan be repaid early. Similarly, where a director has made a loan to the company, the deceased’s estate will want the loan repaid. Business loan cover will protect against the financial consequences by providing a lump sum benefit to repay the outstanding loan.