When the company you keep, may not be the company you seek!
Have you ever asked yourself whether you would be resentful if a shareholder, who didn’t understand your company, tried to tell you what to do? This is exactly what could happen if a fellow shareholder died and their beneficiaries then own the shares!
It is usual for the shareholding to be passed to a spouse or beneficiary through Will provision and that is where the difficulty can lie. Without the appropriate measures in place, then this share capital could end up in the wrong hands such as an inexperienced family member of the deceased who has very little understanding of how the business operates.
To avoid such issues, it is possible to make arrangements by use of a formal agreement that gives the option to both the continuing shareholding directors and the deceased’s beneficiaries for the purchase of the deceased’s share of the business. This secures the ownership for the remaining shareholders and ensures that money is available for the beneficiaries if either party requires this conclusion.
To discuss this in more detail, please contact Georgia Leahy, Financial Planner at Kreston Reeves Financial Planning here or on +44 (0)330 124 1399.
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