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Shareholder Protection


It is a common misconception that if a fellow shareholder of a privately owned limited company dies, the deceased’s shares can be easily taken over by the surviving shareholders.

In reality, the shares fall into the deceased’s estate, which would be typically inherited by the deceased’s spouse.  As a surviving shareholder, you would have to buy out the deceased’s spouse, who most likely has no intention of running the business with you, but nonetheless demands a suitably high value for the shares.

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In some cases, your deceased business partner’s spouse (whom you may have got on well with until now!) will want to be involved in running the business, or even bring in a third party to ensure their interests are being well served.

In the meantime, your business is slipping away from you as you struggle to maintain control and instead of concentrating on ensuring your business survives this difficult period, your energy is being diverted to finding the money to buy the spouse out!

The good news is that Bankfield can help!  With simple, cost-effective and legally robust planning, we can ensure that in the event of a shareholder dying, you are in a position where you have the cash available to buy out the deceased’s shares in a tax-efficient and legally enforceable manner.

To speak to a qualified and experienced member of our Corporate IFA Team, in complete confidence and with no obligation, please call us on 0116 253 5600 or complete the enquiry form.

Shareholder Protection is a form of life insurance, usually written in a Business Trust, that ensures that if a shareholder of the business dies, a lump sum representing fair value of their shares is paid out so the remaining shareholder(s) can buy the shares from the deceased’s estate.  We recommend it is written in conjunction with a Double-Option Agreement (which we can arrange) so that the transfer of shares for the suitable financial consideration is legally enforceable by either party.

We would also recommend that this process is done in conjunction with a Corporate Will.

Bankfield’s Corporate advisers specialise in Business Risk Management and have up to date qualifications in trusts, insurance and tax planning to help ensure that you receive the most suitable professional advice.

Trust Planning and Tax Planning are not regulated by the Financial Conduct Authority.