If you are one of a number of shareholders then you should look at protecting your shares. Think about what would actually happen if your company lost a major shareholder. Would you be able to buy those shares back from the deceased beneficiary at a price they think reasonable?
Successful businesses will often have shareholders who may or may not be actively involved within the day to day running of the company. But if someone is investing money within the company or buying shares they will often want to know that the investment is safe. Having shareholder protection insurance with a shareholder agreement is the best way of doing this.
What Does It Cover?
Shareholder protection insurance will cover death or critical illness of each shareholder and provide a lump sum of money to the shareholders.
What happens if there is a claim?
If a shareholder dies or suffers a critical illness (that hits one of the definitions) then the remaining shareholder would need to place a claim with the provider. If the claim is successful the lump sum of money will be paid to the company or directly to the shareholders (depending on how it was set up).
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE.
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