If You Have Not Reviewed Your Shareholders Protection in the
Last 12 Months Please Take a Moment to Read This

Earlier in the year I received an enquiry from a business who had put shareholders protection in place six years ago (through another broker who is no longer trading) for the three business partners. Sadly one of them had just passed away and they asked whether I could help them understand how they make the claim and organise the shares.

I found out a little more about the business and quickly learned that at the time of putting the cover in place they were a small business with their three directors and one administrator. Over the course of this six year period they grew to employ nine more staff and had won plenty of large contracts from their competitors. With their annual profit now more than five times what it was when they set their policies up, their shares were worth considerably moreā€¦

HOWEVER neither the business nor the broker had reviewed the shareholders protection during that time meaning the agreement that came into force purchased the shares from the deceased directors estate for their value from six years ago.

I am sure there are many more policies out there that would cause a similar issue so my recommendations would be:

  1. Have a regular annual review with your broker.
  2. You can set your cross-option agreement up differently allowing for the value of the shares to fluctuate.

If you would like some advice or to check your policy please enquire by calling us at 01202 082380 or by email at matt@havenfs.co.uk

Matthew Thomas
Managing Director