E: info@fulcrumfinancial.co.uk

T: 01904 208024

If you run your own business, we think you might like this page!

It’s equally important if you are self employed that you make sure your business is protected. Often this can be done in a tax-efficient manner.

We can help in the following areas:

For example, the potential situation below illustrates why Shareholder Protection is important for Limited Company Directors:-

Louise, James and William are co-directors of an IT company.

Louise set the company up initially. It grew very quickly and she decided to reward her two key employees with a stake in the business to help incentivise them and promote further growth.

Louise now owns 60% of the company with James and William owning 20% each.

If Louise was to die, with no shareholder protection in place, then her husband Andy can take his place on the board. This would give Andy the control of the company. However Andy doesn’t work in IT and has no interest in this.

Plus, James and William are uncomfortable at the thought of this happening and the loss of control of their business to Andy.

Simple life insurance with a cross option agreement could make this really simple. A life insurance policy is taken out on Louise with James and William the effective owners of the policy. The sum assured is for the value of Louise’s shareholding. In the event of Louise’s death, then the cross-option agreement means either party (Andy OR James & William) can initiate a compulsory sale/purchase/transfer of ownership for Louise’s shares.

This means Andy would receive a large sum of money to help replace Louise’s income and bring up the kids, and James and William retain control of their business.

Get in touch to find out how we can help

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What our clients say...

Very friendly and helpful service. Took into account my personal circumstances and worked around me to ensure that I could get things moving as soon as possible. Roger explained things well and he was extremely approachable.
Dr M – Harrogate