20 Warners Road,
Newton Longville, Buckinghamshire, MK17 0BL
Business Continuity & Sucession Planning
For business owners, when you consider that business shareholdings can often be a significant, if not largest, proportion of your legacy estate. It is therefore essential that you consider the following:
Research in Legal & General's and Institute of Directors' 'State of the Nation's SMEs Report in 2018, found:
Considering this, how would this effect your business? Have you considered the impact?
There are many solutions to resolve this business continuity and succession planning.
Shareholders Agreement (SA) – these are essential for any business and need to be review regularly. With a robust a professionally drawn up SA in place, shareholders rights and obligations will be agreed, rules put in place regarding the sale and transfer of shares, protection for minority shareholders will be provided as well as a structure to resolve disputes.
Cross Option Agreement (COA)– if a shareholder passes away a Cross Option Agreement would allow shares to be bought from the deceased estate to enable the existing shareholders to keep control of the business.
Business Protection Insurance (BPA) - provides the funds to ensure business continuity in the event of a shareholder dying or becoming seriously ill.
There are two options:
The cover amount should be the value of each individual’s shareholding and review every 3/4 years.
Business Powers of Attorney – Have you thought who would run your business if you were incapacitated by accident or illness? Unless you appoint an Attorney, everyday business operations may not be possible; access to bank accounts may be denied, suppliers and salaries might not get paid and the disruption to your company could be catastrophic!