Business Solutions
Our Corporate clients require specialist financial advice for both the Directors / Shareholders and their staff.
Have you considered the following?
Key-person Insurance
Directors and employees with specialist skills or knowledge are key employees of the companies they work for. To lose one through death or incapacity can be damaging to the business. That is why taking out a key-person insurance to protect the company is a wise move.
Key-person insurances can provide several benefits. These can include:
- Paying the costs of a temporary replacement
- Meeting the costs of recruiting a permanent replacement
- Covering the cost of death or incapacity of a key member of staff.
The full scope of cover will depend on the type of policy purchased, but companies ignore the risks of losing key staff at their peril. Shareholders, bank managers, suppliers and customers may not be so laid back.
Shareholder Protection Through Life Assurance
Directors or partners share agreements may provide for the remaining directors to purchase the shares of other shareholding directors when they die. However, there is a risk that the remaining directors may not have sufficient funds to hand when a fellow director passes away unexpectedly.
One way round this is to take out life cover as a source of funding.
To arrange such cover requires the understanding and agreement of all concerned. It will also require some careful figure work to determine how much cover is required. But it will be a comfort to all directors or partners of a business to know that their own or a colleague's death will leave the other directors with sufficient support to carry out the terms of their shareholders' agreement.
Pensions & Raising Capital
Directors may prefer to establish a separate pension plan from that of their employees. The reasons for this are that the term of their employment may be a fixed number of years, their tax position may be more complicated than other employees, or they may prefer to set up a form of self administered scheme more suitable to their circumstances.
Directors and partners may also wish to leverage their company pension scheme at some stage to raise funding for the business. This may be a tax- and cost-efficient way of funding the acquisition of commercial property.
In these circumstances, sound pensions advice will be invaluable.
If any of these areas are of concern to you please contact us.