Have you considered the impact the death of a key employee or business partner would have on your business?
Business owners and their families throughout Ireland are facing this issue every day. Some, however, are much better prepared than others.
As a business owner, you protect your property, your vehicles and equipment. But what would happen to your business if you died prematurely? Would your family stay in the business or would they sell?
You may also need to consider the impact of the death of a key employee or business partner. Would you have enough funds to buy your co-owner’s share of the company from their family? Would the business be able to sustain the financial loss?
Business protection can assist in ensuring the continued survival of a business and provide for a deceased business owner’s family in the event of premature death.
Shareholder/Partnership Insurance (Business Owner’s Insurance)
This provides funds to the surviving business owners to purchase the share of a deceased’s shareholding from their personal representatives. Depending on the structure of the business the cover can be set up on a personal or corporate basis. This cover ensures the deceased’s legal representatives/next of kin are provided for and the surviving business owners retain control of the business.
This type of cover is designed to protect the human assets of the business in the same way as fire insurance protects a company’s physical assets.
Protection is taken out by a company on the life of a key employee to protect the company as a result of the death or serious illness of the key employee.
Gift or Inheritance Tax Planning
As a business owner, you should also take a close look at the implications of capital acquisitions tax if you’re thinking about passing on your business to your family when you die. Inheritance tax can become a real burden where financial resources are tied up in a business. If you don’t plan ahead, your family could be faced with a difficult decision between having to sell the business and borrowing the money to pay the tax liability. There are a number of solutions to this and gift or inheritance tax planning allows you to plan for the tax liabilities which could arise, thus ensuring that the business won’t have to be sold off to pay the tax bill.
At Gallivan Financial, our financial advisers have the expertise to help you identify your business protection needs whether you’re a sole trader, partnership or limited company.
Get in touch today on 064 66 37393. We’ll be delighted to help.
All the best,
The Team at Gallivan Financial