Business Protection

We refer to Shareholder Protection and Key Person Protection as Business Protection – because they protect the business and its shareholders.

Shareholder Protection provides the surviving shareholders or the business with a lump sum to purchase a deceased / or critically ill shareholder’s shares (equity).   This provides for the family of the shareholder, whilst also protecting other business owners.

Life insurance is usually the only way to provide the correct amount of funds at the time they are needed. The sum assured for each shareholder will represent their share of the business value.

Key Person Protection provides your business with a cash injection in the event a key individual was to pass away or suffer a critical illness. The funds can often be a lifeline for the business.

Shareholder Protection

In businesses run by unconnected parties, the death or incapacity of an owner is likely to cause serious disruption and problems for both the business and the family of the owner concerned.

By having a structured shareholder protection agreement in place, the deceased’s estate will receive a fair value for the newly acquired shares. It will also allow the surviving shareholders to remain in control of their business, without potentially unwanted outside disruption.

The first step is to identify the value of the business. This will allow you to calculate the value of each shareholder’s equity in the business.

We would also recommend you review the company’s existing articles of association, shareholder agreement and any other legal documents (cross option agreement).

Key Person Protection

The loss of a key person can often result in a fall in profits. This could be because of sales/revenue falling or due to the costs of replacing such an individual. You may find business relationships with clients or suppliers also suffer.

The funds can be used by the business to aid cash flow, repay outstanding debts, and support staffing costs or towards replacing the individual.

For key person cover, you should first identify who these individuals are in the business. Following that, you will need to calculate their contribution to the business. There are a number of ways to do this that we can help guide you through them.

If you require more detailed information and advice on your existing workplace or setting up a new workplace pension then contact us on 01603 760 866 or enquiries@sgcorporateservices.co.uk.


Corporate Services

Our range of corporate services are aimed at helping ambitious companies, reward, retain and support their employees.

Auto Enrolment

Find out more about your duties as an employer and what we can do to help you support, reward your employees.

Workplace Pension

By 2018 all employers must provide a workplace pension scheme, its up to you to choose the best provider.

Employee Benefits

The right employee benefit package is essential to making sure your valuable employees are looked after.