Here, we look at another important consideration for business owners: protecting the business, its assets and owners’ personal assets from the sudden loss of anyone key to the success of the business.
Have you considered what would happen if you suddenly lost a partner, director or other key person due to disability, a trauma such as heart attack or stroke, or death?
Would you experience a sudden fall in profitability during any restructuring of the business? Could you afford a lengthy recruitment process to find the right replacement? Could the remaining owners afford to buy out a departing partner or their estate?
These are just some of the many issues your business could be forced to deal with at any time.
By implementing an effective business succession plan, however, you can avoid some of the financial problems that can arise from losing someone key to your business.
Key person insurance, buy sell insurance and loan guarantor insurance incorporating life, disability and trauma policies play an important role in effective business succession planning.
Key person insurance compensates the business following the loss of an insured key person. Buy sell insurance provides funds for business owners to buy out a departing owner or their estate, while loan guarantor insurance funds repayment of loans guaranteed by an owner or director.
With the right planning, your business won’t have to worry about the financial implications of losing a partner, director or other key person.
General Advice Warning The advice on this site may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial, tax and/or legal advice prior to acting on this information. Westlawn Wealth Management Pty Ltd ABN 32 124 861 409, Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749, Australian Financial Services Licensee, 105 -153 Miller Street North Sydney NSW 2060.