The Impact of loosing a key person in business!

Have you considered the impact that the loss of a key person will have on your business? Have you signed surety for a business loan? What will happen to your share in a business in the event of your death or disability?    

Scenario 1: You and your partner own a business and you suffer a life changing event. There are not sufficient funds in the business for your partner to buy you out and your spouse is not equipped to assist in the running of the business.

Scenario 2: You employ a key individual who is crucial to the success of your business. He/she suffers a life changing event and is no longer able to work. How will you supplement their contribution to the business and ensure its continued success?
           
Scenario 3: You borrow money to assist in growing your business. The business is not in a position to pay off the debt and your estate does not have sufficient funds to cover the debt.     
                                                                                                           
Business Assurance is a cost effective way to resolve the above scenarios and assist in reducing estate duty if structured correctly. Below are a few solutions to assist you in making the right decisions for your business

1. A buy and sell agreement ensures that in the event of you dying or becoming disabled the other partner(s) will buy the share of the business at a predetermined price.                                                                                                                                                                                    
2. Key person assurance is purchased by the business on the life of a key individual whose services, skills or contacts contribute substantially    to the success of the business. The policy is owned and paid for by the business.                                                                                                                                                                         
3. Contingent liability ensures that when a business owner signs surety for a loan life and disability cover are purchased and if something happens    to the owner the proceeds are used to repay the loan and he is released from surety.        
                       
Have you considered the above in your business? Are you certain a life changing event will not affect your estate or share in a business?

Anton du Preez | Director and Independent Registered Financial Coach
Cell: +27 (83) 445 2066
www.themedowgroup.co.za
The Meadow Group

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