Shareholder Protection (SHP)

The value of pensions and investments can fall as well as rise, you may get back less than you invested.

If you run a limited company and are one of two or more shareholders, you should consider taking out a shareholder protection policy.

On the death of a shareholder, shares will be distributed to the deceased family via their Will (if they have one!). If the remaining business partners wish to continue with the business and buy back the remaining shares, they will need the money to do this.

This is where an SHP policy will come in: Specifically, all shareholders are insured, if one person dies their policy will pay out the remaining shareholder/s and the share can be purchased back from the deceased family after grant of probate.

However, if the deceased’s family do not want sell the shares and would rather be involved in the business then or if the existing shareholder don’t want to buy the shares, for whatever reason, then a cross option agreement can be triggered which makes it mandatory for either party to buy or sell shares.

There are no taxation implication of this buyback as it is effected by way of an option and not a binding agreement.

We differ from other advisory firms in that we provide truly joined up financial advice, meaning that we understand what ‘financial planning’ comprises of, i.e. working with a quality financial adviser, accountant & possibly legal firm, depending on your requirements. We bring these threads together to join up the dots and ensure that nothing is missed from your business and personal financial plan.

For more information, please get in touch.