Business Insurance for Corporations
When a shareholder active in the management of a private corporation
dies, management is immediately disrupted which may adversely
affect the business. Financial loss may occur and reorganization
of management is inevitable.
For surviving shareholders,
there are only four alternatives:
1) Reorganize to included heirs in business
2) Reorganize to include an outsider.
May lack the skills and experience or hold conflicting
management ideas
3) Sell out to heirs.
Agreement on a price fair to all may be difficult to reach
4) Buy out the heirs
Cash to purchase their shares may not be readily available
There is a Better
Solution!
That Guarantees the heirs the full value of their shares
in cash.
That Guarantees the surviving shareholders full ownership
of the business.
The plan is simple:
Shareholders agree by contract (a "Buy-Sell Agreement")
that:
The shares of any deceased or disabled associate will be
purchased by and sold to surviving shareholders in the event
of death or disability
The price, or method for determining it, will be clearly
set forth
The method of financing the purchase will be clearly defined.
Shareholders create a special fund
through business life and disability insurance to finance
the Agreement that will:
Provide sufficient cash when needed - immediately and
economically
Free operating capital for normal business requirements
Eliminate additional borrowing or invading of personal resources
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