It may be uncomfortable to think about, but have you considered what will happens to your business when you die?
Protecting the value built up in a business for your family is often a consideration that is taken for granted. Do the participants in the business know who will carry on trading the business if a ley person or shareholder dies? How will the family of a deceased shareholder access real value from the business if they are not the ones who will carry on the operation of the business? Shareholders need to ask themselves whether they understand the mechanism to acquire a deceased shareholder’s shareholding and how they will raise the cash to do so.
There are a number of legal structures that help to secure the transition of business interests on death and also secure an agreed amount of cash for the purchase of the shares. Valuing a company on a regular basis is also key to understanding the level of risk involved and ties in with arrangements such as Cross Option Agreement and trust planning in Wills. The combination of valuing the business, agreeing the terms of sale and purchase and implementing the right succession planning in a Will avoids dispute, hardship to families and can significantly mitigate inheritance tax.
We can help and advise on these aspects of business safeguarding and we treat each business and the family circumstances individually. For help and advice please contact us.