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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.

'I,m a doctor: do I need financial advice?'

Changes to NHS pensions mean professional help is a must for busy medical people who do not want to risk the shock of an unexpected tax bill.

Please read the attached Quilter article which was published in The Telegraph.

If you wish to discuss your NHS pension and financial outlook please give Paul, our principle adviser, a call on: 07891 614559

extranet.intrinsicfs.com/downloads/library/Value-of-Advice-Campaign---Article-8---I-am-a-Doctor.-...
...

I,m a doctor: do I need financial advice?

Changes to NHS pensions mean professional help is a must for busy medical people who do not want to risk the shock of an unexpected tax bill. 

Please read the attached  Quilter article which was published in The Telegraph.

If you wish to discuss your NHS pension and financial outlook please give Paul, our principle adviser, a call on: 07891 614559

https://extranet.intrinsicfs.com/downloads/library/Value-of-Advice-Campaign---Article-8---I-am-a-Doctor.-Do-I-need-financial-advice.pdf

'Why talking about money is good for your health'

Beginning to organise your finances may seem a daunting step for some but doing so can reduce stress levels, leading to a healthier and happier lifestyle. This article offers tips for readers on how to start open and honest discussions about money, not only to improve their financial well-being but also their health.

Take time to read the attached Quilter article which was published in The Telegraph.

extranet.intrinsicfs.com/downloads/library/Value-of-Advice-Campaign---Article-7---Why-talking-mon...
...

Why talking about money is good for your health

Beginning to organise your finances may seem a daunting step for some but doing so can reduce stress levels, leading to a healthier and happier lifestyle. This article offers tips for readers on how to start open and honest discussions about money, not only to improve their financial well-being but also their health.  

Take time to read the attached Quilter article which was published in The Telegraph.

https://extranet.intrinsicfs.com/downloads/library/Value-of-Advice-Campaign---Article-7---Why-talking-money-is-good-for-your-health.pdf

4 days ago

Torbay Financial Services

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4 days ago

Torbay Financial Services

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66 Fore Street
St Marychurch, Torquay
Devon TQ1 4LX

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

By clicking on links from this site you are departing from the regulatory site of Torbay Financial Services.

Neither Torbay Financial Services nor Positive Solutions (Financial Services) Limited is responsible for the accuracy of the information contained within the linked site.

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