You chose your business partner for a reason. You’re a team and you came together to build something great, something valuable. But what if tragedy struck and your partner was gone? Do you know what would happen to his stock in the business? Do you know if you would suddenly be burdened with a new partner that you didn’t choose and who not only doesn’t know your business but could actually harm your business? And even worse, be unbearable to work with?
At PartnerShield we help protect you and your business partners’ interests if catastrophe strikes and one of you passes away.
Many businesses have a standard buy-sell agreement that specifies how business interests will be transferred, to whom, and under what circumstances in the event of the loss of a partner. Many businesses also have key-man insurance to try to protect the business in case of a catastrophe like this. But PartnerShield takes the process further, using what we call a Funded Buy-Sell Agreement (FBSA) so that the business has guaranteed financing in place specifically tying together buy-sell agreements and key-man insurance into a comprehensive solution to allow for the protection not only of the business, but of all the partners’ families. Without an FBSA, while all the intent may be there to protect your business and your family, there are often critical holes in the set up that can leave you as exposed as not having any buy-sell agreement or key-man insurance at all.
PartnerShield can assist you from beginning to end in protecting you, your family, and your partners, and keeping your business YOUR business.
First, we work with you to establish an appropriate VALUATION for your business. That may or may not be the actual value of your business today. It is often determined by what you and your partners believe the future value of the business will be….the appropriate amount that you and your partners would need if any of your heirs were unexpectedly forced to sell their stock. This can be a set dollar amount, may incorporate a formula such as a multiple of revenues or earnings, or may specify that an independent valuation be performed. However it’s done, having an agreed-upon amount or method prevents valuation disputes between a deceased owner's estate and the remaining owners.
Next, we move quickly to secure affordable FUNDING to allow your business to have a source of cash immediately available to allow for the purchase of any of the partners’ stock in the even of a tragic event. This funding is often best accomplished with some form of life insurance or key-man insurance, with premiums paid by the business. This funding method has the advantage of immediately making the funds available equal to the established valuation and when desperately needed to execute the buy-sell agreement. There are several other funding methods possible, including creating sinking funds or bank loans. However, none of these provide the assurance that funding with life insurance or key-man insurance accomplishes. Whatever the funding method chosen, it is a critical piece of the puzzle to make sure that you, your family, and your partners are properly protected.
Finally, we either work with your existing attorney or help you find one within our national network of expert contract law firms to memorialize an appropriate FUNDED BUY-SELL AGREEMENT custom designed between the individual business owners and the business entity. This buy-sell agreement will identify the events that will trigger a buy-out, including not only death of a partner, but also possibly other events which may result in the loss of a key-man business partner, such as disability or divorce. In the event of divorce, for example, your partner’s stock could end up in the hands of their ex-spouse, which may cause tremendous problems when it comes to the control of your business.
PartnerShield will be your partner in securing full protection that allows you to respond to an unexpected disaster in responsible way that is best for every partner and their families.
You chose your partner for a reason. Don’t end up with a partner you didn’t choose.
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PartnerShield is headquartered in Florida and is licensed and registered to do business in all 50 states.