Shareholder Protection

Shareholder & minor shareholder protection

If a shareholder of a business passes away or becomes ill and cannot work, shareholder protection helps to ensure the surviving shareholders can buy all or some of the remaining shares to keep control of their business. The policy will provide the funds that enable them to buy the shares at a pre-agreed value.

We can source you a shareholder or minor shareholder protection arrangement that suits your business, setting out how shares should be valued and giving the shareholders the right to buy shares, or the outgoing shareholder the right to sell.

Why do you need Shareholder protection?

The death or critical illness of a shareholder can be a very unsettling time for both their family and the remaining shareholder directors in the business. The shares pass to the beneficiaries of the estate, most commonly family members, and this situation can cause multiple sources of tension that shareholder protection helps prevent.

For example, if the new shareholders are not interested in running the business or want to sell their shares to a competitor, if they want to impose their will on the business against the wishes of the surviving shareholders, or if the remaining shareholders are reluctant to release funds to buy back the shares themselves – then a shareholder protection policy determines how such a situation is resolved before it comes to pass.

What will you get?

• A tailored policy that suits your shareholder agreement
• Peace of mind that you have support and the funds necessary to retain control of your business
• The guidance of support of a specialist broker, with access to a range of providers for businesses of all sizes.