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E-mail: enquiries@pearson-hinchliffe.co.uk | Telephone: 0161 785 3500

Shareholder Protection Insurance

What would you do if one of your shareholders died?  You might lose your business.

If one of your partners, or a shareholding director were to die, what effect would it have on your business?  Without shareholder protection insurance the impact could be serious.

Consider losing your majority shareholder director.  They have important voting rights that directly affect the running of the company.  If a majority shareholder dies, these rights normally pass to the deceased’s dependants; your new business partner!  The death of a partner in a partnership usually results in the same outcome.

This could affect your company in two ways:

1) The dependants are now shareholders with a say in the running of the company.  They probably won’t have the necessary experience and they may not have the same objectives as the surviving shareholders have for the business.

2) The dependants might decide to sell their shares.  Unless the other shareholders have sufficient funds to buy them, they may have no option but to sell them to a third party, perhaps hostile or even a direct competitor.

Depending on the terms of the partnership or shareholding, the dependants may gain control of the company.

A simple solution to these scenarios is to set up a partnership/shareholder agreement with protection insurance.

A partnership/shareholder agreement is a legal contract between all of the partners and shareholders, who agree to sell their company share in the event of their premature death. Shareholder protection insurance policy will provide the money for the surviving shareholders to be able to afford to purchase the deceased shareholder’s share, helping to maintain the security of your business long term.

Zurich Assurance Ltd is a leading provider of business protection of this kind. 

The average fee for drawing up a shareholder agreement is £1,500.  Pearson Hinchliffe Commercial Law will be numerated by Pearson Hinchliffe Financial Services for the related legal work preparing the shareholder agreement, in most cases saving you the entire average legal costs of £1,500.

To speak to someone today about shareholder protection insurance, or any other business protection issues, please contact us using the details below. 

Pearson Hinchliffe Financial Services | Hollinwood Business Centre, Albert Street, Hollinwood, Gtr Manchester, OL8 3QL
Telephone: +44 (0)161 785 3500, Fax: +44 (0)161 624 2589, Email: enquiries@pearson-hinchliffe.co.uk