Corporate Financial Planning
It goes without saying that companies require specialist financial planning advice.
Too many companies leave this aspect of their business to chance risking their business in the process.
Expertise is needed to plan around corporate tax requirements and any implications that arise. Companies have many specialist needs including business protection, partnership & key person protection and employee benefit schemes.
Business protection
This deals with protecting your business from the adverse financial effects of the death of a key person, partner or shareholder. Business protection can be especially important to smaller companies whose reliance on key individuals for profit may be greater than large corporates.
Partnership/Director Share Purchase
Deals with protecting the families and co-owners in the event of the death of one of the partners/directors. Many small yet successful businesses operate as a partnership of one, two or more individuals, each one of which often brings a unique and valuable skill to the table.
If one of the partners dies, his share of the partnership or company passes on to his estate, often a surviving spouse or children. Technically, if the business is a partnership, the partnership is dissolved, which may not be convenient to the surviving partners. If the business is a limited company, the surviving benficiaries will inherit the deceased shares, and, in so doing, will own part of and possibly even gain a controlling influence over the remaining business, but without necessarily having the knowledge or skills to contribute.
It is often in the interest of all parties to put in place an agreement that allows the surviving partners or shareholders of a company to 'buy out' the interest of the deceased partner/shareholder. Each party agrees beforehand the value of his/her share and a combination of term assurance policies and legal documents are put in place to ensure that in the event of a partner or shareholders death, the remaining co-owners have a sum in place to buy out the family of the deceased for a fair sum. Such an arrangement can provide the deceased heirs with a cash lump sum equivalent to their inherited share value, whilst returning ownership and control of the business to the surviving partners/ shareholders. There are a number of ways of doing this, including buy and sell agreements, and cross option agreements. The best option will depend upon your company's circumstances and those of its potential benficiaries.
Key Man insurance Is used to inject a lump sum of cash into the business in the event of the loss of a 'key person'. A key person may be a top salesman, or a key designer in a design company etc, - someone whose death would have a direct and adverse effect on the companies income. The usual solution is a term assurance policy.