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Shareholder Protection

What is shareholder protection? This is where a small business operates as a private company and there are directors and shareholders.

The value of pensions and the income they produce can fall as well as rise, you may get back less than you invested.

SHAREHOLDER PROTECTION

Shareholder protection is similar to partnership protection, but there is no compulsion on the part of the surviving shareholders to buy the deceased shareholder’s shares from their estate. Even where they would like to, the cash is not always readily available.

THE PROBLEM IS TWO FOLD:

Possible financial hardship for the deceased’s family – there being no ready market for the shares (especially if the deceased held a minority holding) or restrictions laid down in the transferability of the shares in the company’s Memorandum and Articles of Association.

 

The surviving shareholders find themselves sharing control of their business with an outsider who may know nothing about the business.

 

WHAT IS THE SOLUTION?

As with partnership protection, a life assurance plan would enable the surviving shareholders to purchase the shares from the deceased shareholder’s estate.

Again, the type of plan and length of term will vary according to the company. Term assurance could be used to protect shareholders against death before retirement. Convertible term or whole of life plans could be considered if the shareholder wanted further protection after they have retired.

Again, the type of plan and length of term will vary according to the company. Term assurance could be used to protect shareholders against death before retirement. Convertible term or whole of life plans could be considered if the shareholder wanted further protection after they have retired.

By adjusting the shareholders remuneration, equalisation of contributions can be achieved if they are all working for the company. What is the tax situation?

The tax situation for shareholder protection is similar to the tax situation for partnership protection.

A particular general need can sometimes be met by alternative solutions. For example, family protection to provide cash in the event of death could be provided by term assurance or whole of life assurance. Protection against ill health could be provided by an accident and sickness plan or permanent health insurance.

ADVICE

We are pleased to offer consultation and advice in this complicated area and have strong relationships with specialist legal professionals who can assist with any required contracts and business trusts.

In this week's edition of Between The Lines you will find articles including:

* WTO points to 'silver lining' amid steepest trade fall in
history
* Losing Face(book)
* Quilter Market Explainer: Imagining the 'new normal'

www.quilterinvestors.com/globalassets/quilter-investors/news-and-views/between-the-lines/july-202...
...

In this weeks edition of Between The Lines  you will find articles including:

*   WTO points to silver lining amid steepest trade fall in 
     history
*   Losing Face(book)
*   Quilter Market Explainer: Imagining the new normal

https://www.quilterinvestors.com/globalassets/quilter-investors/news-and-views/between-the-lines/july-2020/between-the-lines-week-27.pdf

Working on your behalf

We here at Torbay Financial Services continue to monitor and manage your investments in challenging times.

We continue to conduct annual reviews of your investments either by telephone or zoom video link. Our office is also open from 10.00 am until 2.00 pm Monday to Friday for a face to face meeting should you prefer. All covid cleaning and sanitising protocols are in place as well as a large and substantial safety screen.

Existing clients are more than welcome to call any time they wish to chat about their investments and pensions. Through regular communication between you and the adviser you benefit from peace of mind that comes from knowing there's always someone looking out for you.

And for those new clients who wish to protect their current investments and pensions we can look at these and advise accordingly. Ensuring you are not taking more investment risk than you are comfortable with.

Call us today - we look forward to hearing from you 😃

☎️ Paul the Adviser - 07891 614559

💻 paul@torbayfinancialservices.co.uk
...

Working on your behalf

We here at Torbay Financial Services continue to monitor and manage your investments in challenging times. 

We continue to conduct annual reviews of your investments either by telephone or zoom video link.  Our office is also open from 10.00 am until 2.00 pm Monday to Friday for a face to face meeting should you prefer. All covid cleaning and sanitising protocols are in place as well as a large and substantial safety screen.

Existing clients are more than welcome to call any time they wish to chat about their investments and pensions. Through regular communication between you and the adviser you benefit from peace of mind that comes from knowing theres always someone looking out for you. 

And for those new  clients who wish to protect their current investments and pensions we can look at these and advise accordingly. Ensuring you are not taking more investment risk than you are comfortable with. 

Call us today - we look forward to hearing from you 😃

  ☎️ Paul the Adviser - 07891 614559

💻    paul@torbayfinancialservices.co.uk
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66 Fore Street
St Marychurch, Torquay
Devon TQ1 4LX

e: paul@torbayfinancialservices.co.uk
t: 01803 411460   m: 07891 614559

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Neither Torbay Financial Services nor Quilter Financial Planning Solutions Limited is responsible for the accuracy of the information contained within the linked site.

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