Partnership Protection
Shareholder Protection
Sophisticated protection agreements that ensure smooth ownership
transitions while preserving business value and family security.
Essential planning for any partnership or family business.
The Challenge
When Partners Pass Away
The death of a business partner or shareholder creates immediate challenges that can threaten both the business and the deceased’s family. Without proper planning, surviving partners may find themselves in business with the deceased’s spouse, children, or even external parties who inherit the shares.
Meanwhile, the deceased’s family may own shares they cannot easily sell, leaving them with an illiquid asset that provides no immediate financial benefit during a difficult time. This situation benefits no one and can lead to costly disputes and business disruption.
Shareholder insurance provides a structured solution that protects all parties, ensuring the business continues under the control of surviving partners while providing immediate liquidity to the deceased’s family.
Without Protection
Common problems that arise when shareholders
die without proper arrangements
These issues can destroy business value and create lasting family problems.
Seamless Ownership Transfer
Ensure smooth transition of shareholdings without disputes or external interference, maintaining business stability.
Fair Valuation Protection
Pre-agreed valuation mechanisms ensure fair prices for shares, protecting both surviving and departing shareholders’ interests.
Business Continuity
Maintain control and operational stability by preventing unwanted external shareholders from entering the business.
Family Security
Provide immediate liquidity to departing shareholders’ families while preserving the business for continuing owners.
Protection Structures
Shareholder Agreement Options
Different business situations require different approaches. We design shareholder
protection arrangements that match your business structure and stakeholder requirements.
Cross-Option Agreement
Gives surviving shareholders the option to buy, and the estate the option to sell
Best Suited For:
Balanced approach suitable for most partnership structures
Automatic Accruer
Shares automatically pass to surviving shareholders at death
Best Suited For:
Simple arrangement, ideal for businesses where shareholding concentration is desired
Gift and Loan Scheme
Combination approach providing maximum flexibility for both parties
Best Suited For:
Complex structures requiring sophisticated estate planning
Key Benefits of Shareholder Insurance
Fair Valuation
Determining Share Values
Valuation Approaches
Fixed Price Agreement
Pre-agreed fixed price, reviewed periodically
| Pros: Simple, certain | Cons: May become outdated |
Formula Valuation
Based on multiple of earnings or assets
| Pros: Tracks business performance | Cons: May not reflect true market value |
Fixed Price Agreement
Independent accountant or valuer assessment
| Pros: Current market value | Cons: Potential for disagreement |
Example Calculation
| Business Annual Profit | £200,000 |
| Industry Multiple | ×4 |
| Total Business Value | £800,000 |
| Partner’s 25% Share | 25% |
| Insurance Required | £200,000 |
*Example shows formula-based valuation approach
Implementation
Setting Up Shareholder Protection
1
Business Analysis
Review business structure and identify shareholders requiring protection
2
Agreement Design
Draft shareholder agreement with appropriate buy/sell mechanisms
3
Valuation Setup
Establish fair valuation methods and review procedures
4
Insurance Arrangement
Structure life assurance policies to fund the agreements
5
Legal Documentation
Complete legal
agreements and policy
documentation
Client Experiences
Trusted by Discerning Clients
Our shareholder agreement gave us complete peace of mind. When my business partner sadly passed away, the process was seamless – his family received immediate payment and I retained full control of the business.
Michael Chen
Managing Director, Chen Engineering Ltd
The shareholder insurance arrangement protected our family business perfectly. We maintained control while ensuring departing family members received fair value for their shares.
Elizabeth Hartwell
Family Business Owner, Hartwell & Sons
Protect Your Partnership
Secure Your Business Future
Don’t leave your business and families exposed to uncertainty.
Discover how our shareholder insurance solutions can provide protection and peace of mind.