Partnership protection
If your business partner dies, partnership protection ensures a positive financial outcome for their family, any remaining partners, and the future of the business.
What happens following the death of a business partner?
The likelihood is that their family will be entitled to the value of the deceased’s interest in the partnership via the partner’s Will. There are then several courses of action:
- The most obvious course of action would be for the remaining partners to take on the deceased’s interest and to compensate the representative
- Without an agreement specifying what is to happen, the partnership will be dissolved on the death of a partner
- In many cases, the surviving partners are likely to want to continue to trade and so will buy the deceased’s interest, or compensate their representatives
- Where the partners have agreed to dissolve the partnership and realise the value of its assets, they will need to pay to the deceased’s estate their share of the value of the business
How we can help:
- Planning ahead – the easiest solution is to plan ahead, so you don't need to borrow money, meaning you can access the funds needed without problem
- Finding you a life assurance (and/or critical illness) plan on the life of each of the partners – meaning that funds can be provided when they are most needed, e.g., on the death of the partner, or when the partner suffers a critical illness
- A complete solution - the solution to the problems faced by many partners lies in the proper use of life assurance plans (held in trust), in conjunction with a properly drafted partnership agreement.
-
- Why is a shareholder/partnership agreement important for my business?
Would you like to protect your business partnership?
