Shareholder Protection

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Protecting the business

What happens if your co-director passes away?  Who are you in business with now? Probably their close family, who are likely the beneficiaries as named in their will.

What skills do those family members bring to the business?  Can you work with them?  Do you want to work with them?

Shareholder protection is a mechanism that provides funds, subject to the right cross-option agreement, to allow surviving directors to buy out the family.  The company purchases life assurance on the lives of the directors.

This provides fair value to the estate, and allows the business clarity and the ability to move forward.

Shareholder Protection Case Study

The problem:

How do company directors make sure their families are delivered financial security, whilst leaving their fellow directors the ability to continue to run the business in the event of their death?

The solution:

Shareholder Protection is designed to help the owners of a business by providing a capital sum to purchase shares in a business if a co-shareholder were to

  • die
  • become terminally ill (when life expectancy is less than 12 months).
  • be diagnosed with a critical illness

Subject to a cross-option agreement, this makes funds available to properly compensate the family for their shares, whilst delivering control of the business to those still running it.

This agreement between owners ensures that shareholders maintain the rights and the money to buy the remaining shares and retain control of the business.

Share Protection should be placed in trust from the outset.

About 8 years ago I turned up at Taylormade’s offices with a box of files from pensions to investments and said ‘help’.  Greg walked me through the procedures and the journey I would embark on to help me achieve my financial goals.    I would have no problem in recommending their services

S.D. London

“We had recently sold our business and I was looking for some financial advice regarding pensions, investments and savings.

By introducing tax efficient investments and investment ISA’s, consolidating several pensions I had into one fund and providing safe, low risk investment opportunities for the funds that I was looking to utilise.

Despite the volatility of the stock market we have been very pleased with the progress to date of the various investments. The tax benefits of the VCT and EIS investments certainly helped to mitigate the capital tax charges following the sale of the business.”

Client from Essex

“I was looking to remortgage to buy another property intented as a long term investment.

Greg was a tremendous support to me during this daunting process. He took time to listen and understand my long term goals of investing in property for my future. He was knowledgeable and was able to discuss alternative investment options with me to ensure I was making decisions. He helped me weigh up the pros and cons of available options. Once I decided on property investment, he was able to guide me through the remortgage minefield and was thorough in his explanations of different products. Again this was immensely useful in finding a suitable product tailored to my circumstances and needs.

I’ve now purchased my second investment property and feel more secure about my future.

The service Greg provided was truly faultless! I appreciated the attention to detail and personal touch of working with a family man who genuinely cared.

Client from Surrey

“Taylormade Financial Management has been of huge assistance to me in organising my various financial affairs, including pensions and investments in a tax efficient manner. I would strongly recommend Taylormade for a bespoke, professional and impartial service”

D. L. Essex

You never bulls*it me, and I always get consistent advice.

D.W, Kent.

“Greg has helped me over the years with a range of financial advice: pension, investments following the sale of property, and planning for the future.”

Client from London

“I had been recently widowed and I needed to consider my future and wasn’t sure where I was going financially.

Greg met with me and went over my circumstances and thoughts for the future. We discussed my options, where I wanted to be and when, he then came back with a flexible and workable plan.

I am now in a position where I feel less unsure about the future and comfortable that I can now make those important life changing decisions when I am ready.”

Client from Surrey

“Initially we needed to remortgage, Greg and his team were extremely helpful throughout this process. We then approached Greg to give us advice on our current pensions and arrange for a savings and investment review, again the professionalism and expertise were second to none.

His team found us a very competitive mortgage, the advice and information was superb. Gregs help with our pensions has been superlative, he has explained exactly how he can help and has kept us up to date with any and all details.”

Client from Surrey

“I had a number of pensions that I wanted to consolidate in preparation for retirement. I also needed to assess how much income I could generate from pensions and how my other investment could add to retirement income.

I now have a small consolidated portfolio invested in drawdown and a stocks and shares ISA with which I am willing to take more risks. Greg understands that I like to manage my own portfolio and regularly discusses the economy and different investment options related to my risk profile. He guides my investment rather than doing it all for me. He has also helped me to secure mortgages on investment properties.”

Client from Surrey

“Thanks again for your financial planning and nous that has got me to the point where I can think seriously about a decent standard of living in retirement. I really didn’t think that was ever likely to happen and it certainly wouldn’t without your direction.”

D.W. Bucks.

“I needed to combine several pensions into one place and pent several hours over a couple of weeks advising me of my options while taking care to listen to all my needs.”

Client in Kent

“We recommended (she) spoke to you about her pensions after the amazing job you did for us and continue to do with our savings.”

S.R. Middlesex

“I needed advice on my mortgage, pension and savings.

I had two mortgages, one of which had an endowment that wasn’t going to pay anywhere enough to cover the outstanding balance. Greg was a great help and offered sound advice. Greg has also handled my pension for a number of years and has given great advice with regards to my savings. I didn’t want to be too risky and the options he offered were perfect.

Following Greg’s advice I have now cleared my one of my mortgages and am well on the way to clearing the other one early. My pensions and savings are all doing well.”

Client in Surrey

“You are the only person I know who can make pensions sound interesting.”

N.F. Kent

“Now was the time to step up my pre-retirement planning and with the complexities of pensions and planning for this critical stage in my life having a professional to guide me was essential.”

Client from Surrey

The cross-option agreement is an essential item in this equation; it is this document that makes sure the benefits are placed in the right hands at the right time.  Without this, the tax efficiencies cannot be not delivered.

Arranging this type of cover on a five-year renewable basis can help keep the cost competitive, whilst giving the peace of mind that cover is in place.

Arrange a no-obligation chat

If you would like to discuss your needs and how we can help you, do reach out.  We can offer you a confidential discussion with no obligation, in person or via video call.