If a shareholder in your private limited company were to die would you be able to buy their share of the business? If you were unable to there would be significant implications for the future of your business. By taking out shareholder protection it would allow the remaining partners or directors to keep control of the business following the death of a business owner.
In the event of a business owner dying or being diagnosed with a terminal or critical illness shareholder protection could provide a lump sum to the other owners. This lump sum could be used to help buy the deceased partners or directors share in the business.
If a company does not have shareholder protection and the business owner were to die their share of the business would be passed to their family. This could cause several problems; the other owners would have less control on the running of the business or they could sell the share to a competitor.
For more information on Shareholder Protection, please contact us.