Three equal shareholders had built a business worth £2.8m with no agreement covering what happened if one of them died or became critically ill.
The problem
Without a cross-option agreement, a deceased shareholder's stake would have passed to their estate — leaving the surviving directors in business with someone who had no involvement in it, and no funds to buy the shares back.
What we did
- Independent valuation of the business
- Cross-option agreements drafted with the company's solicitor
- Life and critical illness cover arranged to fund the options
- Policies written in trust to keep proceeds outside the estates
- Annual valuation review built into the arrangement
Outcome
Ownership succession is now documented and funded, at a combined premium under £400 per month.
