Business Succession Planning

Shareholder / Partnership assurance: "Ensure ownership of the business stays in the right hands"

If a fellow shareholder/business partner became seriously ill or passed away, it is likely that his/her family would like to sell their share of the business. It is also natural that the surviving business owners will want to retain full control over the business that they have worked so hard & so long to build up.

Despite having to deal with the loss of a fellow colleague, the remaining owners could be also faced with a common financial dilemma:

How can they quickly raise sufficient funds to buy-out the departing shareholder's family & provide the family with a fair price?

However - If the surviving shareholders/partners are unable to come up with the necessary funds, the departing shareholders family may have to...

• sell the shares to a third party (who may have different ideas or motives for getting involved in the business)
  
• appoint a family member to the board (who may not have the skills required to contribute to the running of the business).

Is there a solution?

All shareholders / partners should agree to a succession plan that will ensure that the surviving business owners have the authority and the necessary funds to buy-out a deceased / seriously ill owner's share.

A "Business Protection Assurance" plan can be set up, to pay out a lump sum to the surviving shareholders / partners in the event of the death or even serious illness of a shareholder/partner. This would provide them with the necessary funds to purchase their departing colleague's share of the business for a fair price.

If you would like advice on Business Succession Planning OR a copy of one of AIB's Succession Planning guides, please complete our contact form & your local AIB Financial Adviser will be in touch.

Keyperson Assurance: "Protection for your business against loss of profits"

All businesses, whether large or small, are heavily dependent on one key asset - their people. It is people who build up a successful and profitable business, not plant or machinery. The profitability of the business could be interrupted and threatened if a key employee or director / partner were to become seriously ill or pass away.

All businesses should have a succession plan to deal with the loss of profits that may result from the loss of key employees / directors / partners.

A "Keyperson Assurance" plan can provide your business with a lump sum cash injection on the death or serious illness of a key employee.

If you would like advice on Succession Planning OR a copy of one of AIB's Succession Planning guides, please complete our contact form & your local AIB Financial Adviser will be in touch.

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