As you may be aware from previous posts, we recently held another very successful Business Information Seminar which was strongly attended by Accountants, Solicitors and clients alike.
I plan to summarise each presentation over the next few weeks and will start with the first presentation by Justin Kelly, Senior Consultant, Technical Services, Zurich Life.
Justin started by outlining how similiar to how we personally need protection be it mortgage protection, income protection or personal life cover, businesses will need business protection.
Business protection is required to pay off loans, protect profits and/or buy a deceased’s co-owner’s share of the business. A key person in a business may also need to be protected.
Justin reviewed the need for Partnership protection which is required to protect against the serious financial consequences for those left behind in a business on the death of a partner. Any time two or more people come together to carry on business and do not form a company, the law assumes they are in Partnership. They are then subject to partnership law which dates back to the Partnership Act of 1890.
Partnership Insurance will protect the financial security of the partnership by making sure that funds are available to compensate the deceased partner’s estate for his/her share of the partnership.
He also reviewed the need for Co-Director Protection. On the death of a co-director, the surviving directors in the company now have a new business partner who may not be familiar with the business. They may also face loss of control if the deceased director owned more than 50% of the company. A further worry for the surviving directors would be the potential sale of the deceased’s shares by the beneficiaries to another company, maybe a competitor which would have severe repercussions for the company itself.
There is often also a need for keyperson cover. A key person can be a key valuable employee on whose expertise and /or contacts the continued financial success of the company depends
Justin went through the different methods of setting up Partnership Insurance and Co-Director Insurance. He outlined the payment of premiums and the taxation element of such protection plan proceeds.
It was an informative well received presentation. If you have any queries on any matter relating to business protection please contact us at 053 9233640.