Would you or your family be able to easily extract the value of your equity?
Can the business continue to operate without you, and would your departure cause a decrease in turnover or even cause the business to cease operations?
Shareholder protection, supported by a Buy/Sell Agreement establishes how a business will continue to operate should an injury or death take place, and ensures the value of your interest will be paid to yourself or your estate in return for the transfer of equity in the business.
Less than 30% of business owners have a written plan for the transfer of their business interests. For a four-partner business, the chance of one person exiting due to illness, disability or death is over 70%.
Aroud 2,500 Autralians die each week and no one business, occupation or age group is immune.
|No. of partners||Dying before age 65||Dying or totally disabled before age 65|
|2 Partners||35 in 100||52 in 100|
|3 Partners||47 in 100||67 in 100|
|4 Partners||57 in 100||77 in 100|
|5 Partners||66 in 100||84 in 100|
|6 Partners||77 in 100||89 in 100|
This agreement is a formal agreement addressing funding and shareholder equity transfer; implemented to manage an unforeseen business succession need, due to traumatic illness, permanent disability or premature death.
These agreements require expert knowledge to be professionally drawn up. This agreement ensures that control of the business remains with the right person.
Establishing a Buy/Sell Agreement can remove the financial hardship when an unplanned event takes place and protects surviving principals and family members.
It ensures equity remains tightly held, preventing third parties from becoming shareholders and providing funding to ensure a shareholding can be paid out.
If you answer yes to the below questions, talk to Specialist Advice Services today for a comprehensive assessment of your shareholder protection needs.