A partnership is defined as “the relationship that exists between persons carrying on a business in common with a view to profit”.
If you are in a business partnership, one of the greatest risks is that one of your partners may die, with his or her share of the business passing to someone else. That person may have little interest in the business or, at worst, may be hostile to your objectives. Equally a partner who suffers a serious illness may want to retain the option of continuing in the business or be compensated for their exit from the business.
You will want to ensure that the business continues as smoothly as possible, therefore the safety net is a pre-arranged scheme to ensure the surviving partners have enough funds to buy out the interest in the business, or compensate the deceased’s dependants.
Partnership protection can be put in place to cover the loss of a partner. Cover needs to be arranged to protect your business and meet criteria for legislative and tax purposes.
Whatever the options are, we can provide the financial advice you need for business protection; please contact us at People and Business. Click here