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Business Wills

A Business Will is not a document in itself but rather a process which considers what happens to any overlapping interests if you, as the owner of a business (or a holder of company shares), should die or become incapacitated, or your business suffers a sudden downturn.

The primary aim of the process is to protect your assets and we will also work with you to review existing business and personal arrangements and assess them against your immediate and future needs. This will help to ensure that your business and personal affairs are in order and provide a plan to implement the recommendations.


What Will Form Part of the Review?

The business review will start by examining your existing Articles of Association and any Shareholders’ Agreements that are in place, your finance and banking arrangements and asset structures. This allows us to determine their suitability and revise if necessary. In parallel we will also review your personal affairs, any Wills, letters of wishes or tax planning to understand your current situation and look at potential future or more immediate scenarios.

After reviewing your current situation, we will recommend and help you to implement a series of steps to ensure both you and your business are in a strong position, both now and in the future.


What are the Key Challenges to Prepare For?

One important consideration is what to do should a business owner die or become incapacitated to the extent that they cannot make decisions. Who will be in charge? Are Lasting Powers of Attorney (LPA) in place to determine who makes decisions if you are unable to? Does your business have appropriate insurance cover for key individuals?

Each business will have its own unique elements to consider but some of the key areas we consider are:

Asset Ownership

How are your assets, both personal and business, held?  If they are subject to finance, it should be clear where this financial liability will lie should there be an issue with payment. There may also be a need to consider reviewing the asset ownership structure.

Shareholders’ Agreements

We will check if an agreement is in place and what it includes.  Any agreement should cover share purchase and transfer terms between shareholders (cross option agreements) that may be required if a key person becomes incapacitated. The agreement should also include where the ultimate ownership and/or control will end up and will link to a review of the business’ Articles of Association.

Share Option Agreements

At the heart of any business is its employees.  Identifying key people who you want to retain by offering a future equity stake can be an effective way of keeping them and avoiding them being poached or potentially striking out on their own. 

Wills and Powers of Attorney

A Will should always deal with business interests as well as personal assets and it should clearly state what happens to any shares in the event of your death. Establishing an LPA ensures that the remaining shareholders (or trusted independent third parties) can continue to make key decisions if another owner becomes incapacitated. We will review your business structures to ensure that your personal arrangements are kept in line with your business framework. 

Succession and IHT Planning

Good inheritance tax planning is crucial if you are passing your shares on to others as it can reduce the tax burden. Consideration will need to be given to business relief for IHT purposes and how that can be protected without simply relying on a spouse exemption. Senior managers may also need incorporating into Shareholders’ Agreements for any transition period.

Pre and Post-Nuptial Agreements and Cohabitation Agreements

Whether you are in a new or existing relationship, we work closely with our colleagues in the BPE Family team and can advise on relevant agreements you can put in place to protect your assets and plan for the future.

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