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Buy/Sell (Business Succession)

Ensuring the smooth transition of equity and cash between shareholders.

What is Buy/Sell insurance?

A Buy/Sell arrangement is a contract that allows transfer of a business to remaining owners if one owner dies or suffers a serious illness/injury and is unable to stay in the business. This is often coupled with insurance policies to provide the money to buy out the departing owner’s share. This allows remaining owner(s) to continue running the business and helps to ensure that the departing owner or their estate will be fairly compensated for giving up their rights to the business.

More Information

Buy/sell insurance is most often held personally but can also be held through cross-ownership, trusts or through a business. There are numerous implications to consider for each structure from taxation to control.  Cover most often takes the form of life insurance, TPD, and trauma insurance with the sum insured being linked to the value of the shareholding for each individual.  This portion of work is often done in conjunction with an accountant for valuations and lawyer for the shareholders agreement.

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