Business Protection

Mills Keep gives you a perspective down the generations

When people start a business they are more concerned with making it successful than what the future might hold.
At Mills Keep we are able to advise on the steps you should consider to protect your business and your financial stake down the generations. Protection can involve the consideration of such things as shareholders agreements or insurance based solutions eg keyman insurance or cross option policies. We make sure the best taxation results are addressed and achieved as they are often overlooked.

Shareholders Agreement

When a new venture is established good principles in the early stages of a business can save massive pitfalls in the future. Mills Keep will put documents in place to ensure you do not have colleagues walking away with shares,
shareholders with a small shareholding blocking decisions, or a company that cannot be sold.

Keyman Insurance

This enables the business to insure itself against the financial loss it would suffer if a key person in the business died or was diagnosed with a critical illness.

Cross Option Policies

A cross option agreement gives surviving shareholders the right (but not the obligation) to require the deceased
shareholders personal representatives to sell the shares to them (known as a Cross Option). It also gives the personal representatives the right (but not the obligation) to require the surviving shareholders to buy the deceased shareholders shares (known as a Put Option). By combining a Call Option with a Put Option in a single agreement each side has the option of forcing a sale of the shares. Cross option agreements should also oblige each party to insure their lives under a life insurance policy for a value which reflects the value of their shares. The proceeds of the policy should be held on a trust for the other shareholders who will be the beneficiaries. These proceeds provide the remaining shareholders with the cash to buy the shares of the deceased shareholder. The cross option agreement should provide a mechanism for determining the price payable for the shares on the exercise of the option. By providing
the price and terms of payment in advance a significant area of dispute is minimised. The structure of the cross option is vitally important for
taxation planning purposes. Important tax reliefs for both inheritance tax and capital gains tax can be lost if the documentation is not properly structured.