Ranger West Financial and Insurance specializes in Business Insurance for Partnerships. Did you know that when a business partner dies the partnership is automatically dissolved? ensure your partnership survives during a difficult time.
When a partner dies, the partnership is automatically dissolved by law. In the absence of an express agreement, the surviving partners face the following alternatives:
- A forced sale attracts bargain-hunters, with assets sold at sacrifice prices
- With Goodwill gone, value of the business is drastically reduced (40% to 90%)
- Surviving partners are out of a job
- Surviving partners may seek a new partner
- Finding a purchaser with enough skill, money, compatibility or professional designation may be difficult
- Convincing the heirs to sell for an agreeable price in time to prevent forced liquidation by creditors may be impossible
- The cost of borrowing to buy out a deceased partner’s shares may prove extremely costly
- Satisfactory credit arrangement may be difficult
There Is a Better Solution!
Partners agree by contract (a Buy-Sell agreement) that:
- The interest of any deceased or disabled partner will be purchased by and sold to surviving partners in the event of death or disability
- The value of respective nterests, or a method of determining them, will be clearly set forth
- The method of financing the purchase be clearly defined
Business life and disability insurance create the funds to finance transfer of business interests thereby:
- Providing sufficient cash immediately and economically
- Freeing operating capital for normal business requirements
- Eliminating additional borrowing or invading of personal resources
Advantages of Business Life & Disability Insurance
- To Surviving Partners – Guarantees full ownership of the business
- To Their Heirs – Guarantees full value of their interest in the business in cash
- To the Business Today – Guarantees business continuity and strengthens its position with customers, creditors and competitors
Today the choice is yours. Which will it be?