Shareholder protection

Shareholder protection is unfortunately something that tends to be ignored amidst all the day to day concerns of running a successful business. However it is vitally important, particularly for private limited companies where there may only be a small number of principal shareholders, to consider what would happen if one of their shareholders were to become critically ill or even die.

Ramifications of such an event can include

• Shares being passed on to dependents who have no interest in the business and would prefer a cash sum
• Other shareholders losing control as a result of not having the resources to buy back lost shares
• Shares being taken over by a competitor

Shareholder Protection can ensure that there are sufficient funds available in the event of the death or incapacity of a shareholder for the business to continue to operate unhindered while the dependents of the shareholder receive compensation that is tax free.

Benefits include:

• Transferring shares to remaining shareholders at a fair price
• Avoiding having to draw on funds set aside for other purposes
• Preventing the sale of shares to competitors
• making all transactions tax-efficient
• Ensuring the financial security of the shareholders dependents
• Maintain continuity in the business

For more information about this and any other financial products please contact Newstead now.