Importance of Life Policies for Partnerships
When you or a key member of your personnel get ill or die, do you have the cash resources within the company to continue trading? Does the company have the ability to pay its debts to the bank, its’ creditors or possibly even it’s shareholders?
Example: Mary and John run an IT firm on a 50:50 basis. The value of the company is €1m.
Unfortunately, Mary dies and her shares pass back to Mary’s husband who works in construction. There is not sufficient cash within the company for John to buy out Mary’s husband and must now run all decisions by a partner that has little or no experience in this area.
This could have been resolved easily by the assignment of a life policy.