Harrison Architects Limited have been in business for 10 years. The company now has a turnover of £950,000 and a net profit of £500,000 after all costs, including director’s remuneration.
Michael, Diane and David are directors of the company and joint shareholders. They each receive a salary of £20,000 per annum and an annual dividend of £60,000.
The business employs 5 staff with a salary roll of £125,000. They have a Business Development Manager called Paul who earns £55,000 per annum and is absolutely crucial because of the business he brings in. If he left the business, died or became seriously ill and unable to work, turnover and profits would suffer.
Michael, Diane and David wanted to discuss ways in which they could protect their business in the event of one of them dying or Paul dying or becoming seriously ill.
We were able to implement Shareholder Protection plans so that on the death of one of the shareholders, the remaining shareholders were able to purchase the shares and continue running the business. We also set up Keyman Cover for each of the directors and Paul to provide the business with a lump sum on the death or serious illness of either of them.