Answered by Tom Conner
Any business that has an element of recurring profitability has a value attached to it which should be protected in the event of a shareholder death. There are various methodologies applied to valuing a business depending on its type and size.
More often than not we will work in consultation with the company accountant to place a suitable value on your business and shareholding for the purpose of shareholder protection insurance. One of the most commonly accepted methods of valuation would be applying a multiple to the net profit of the company, basing your shareholder insurance cover on your proportion of the total shareholding.
It is important to recognise in addition to the valuation of the business to ensure the relevant trusts are in place to ensure your shares are dealt with accordingly. As part of our consultation process we will help you put in place all necessary trusts, with suitable executors appointed and a legally binding Cross Option Agreement which ensures that the wishes of all parties involved are adhered to.
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Jake and Jack and Drewberry were excellent and I would definitely use their services again. We purchased life insurance from them and we are now getting them to look into income protection cover for us. They are very knowledgeable and the set up was a breeze.
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