Share Purchase Protection 

WHAT IS SHARE PURCHASE PROTECTION? 
If one of the business owners were to die or become either terminally or critically ill, share purchase protection insurance could give the remaining business owners enough money to buy the insured partner’s or the shareholder’s interest in the business. 
 
Share purchase protection gives a business’s owners the financial reassurance they need to keep the business on track during an unsettling period for the owners. 
What is Business Protection? 
 
Share Purchase Protection Case Study 
Joan Simmons is one of three shareholding directors of the Mistro Research Company. The company is worth £1.2 million and each director owns a third of the shares in the business. Joan was only 50 years of age when she suffered a severe stroke, but made a full recovery within six months. 
A critical illness claim was submitted to Joan’s insurer, who paid the claim shortly after receiving a medical report from Joan’s neurosurgeon. Proceeds of the claim were payable to the business trust and held by the trustees for the other two shareholding directors. 
 
After making a full recovery, Joan decided she would like to sell her shareholding in the business but agreed to be employed by the firm on a part-time consultancy basis. The two remaining shareholders purchased Joan’s share of the business with the £400,000 from the business trust and each became 50% shareholders of the business. 
Without shareholder protection 
 
Joan may not have been able to sell her shares to the other shareholders if a shareholder protection arrangement had not been put in place. She may have been forced to retain them and continue to deal with the pressures of business ownership. Alternatively, she could have sold her shares to the highest bidder which may not have been with the approval of the remaining two shareholders. 
 

 with shareholder purchase protection in place  

 without shareholder protection  

Contact us today for impartial & independent advice 
Contact us today for impartial & independent advice 
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