As a business owner, you need to consider the impact that the premature death or inability to work due to accident or illness of you or a business partner / key employee would have on the business and indeed your family.
What would happen to your share of the business if one of you died?
- Would the remaining partner be able to afford to buy out the deceased’s share of the business?
- Or would a member of the deceased’s family take their place in the business? Would they want to? Would the remaining business partner want them?
Thankfully there are solutions that can be put in place to manage these situations. Business protection strategies can be put in place to protect partners’ interests in the event of death of one of the partners. This protection enables the surviving partner to buy out the deceased partner’s share, without the potential headache of having to raise finance to do so. These strategies also formalise the arrangements and remove any potential misunderstanding of intentions should the situation arise.
Likewise, income protection is a very important benefit for business partners. Should you or your partner be unable to work due to illness or accident, how would the business partner feel about continuing to pay the ill person’s salary into the future?
If both partners protect their income, this situation can be avoided. The ill person is paid independently of the business, allowing the business to move forward without a financial drag on it.
With some business protection products, there are tax saving opportunities too and again this is an area of expertise of ours. We can help you to identify the best solutions for you.
If you would like to find out more about how we can help you achieve financial security for you and your business partner, please give us a call.