Prudent company owner/managers with succession planning in mind should consider entering into a Cross Option agreement with their fellow shareholders to protect against the untimely death of a shareholder.
This agreement makes reference to the shareholders' life policy, which is held on trust for the other shareholders. In the event of the death of a shareholder, the agreement enables the deceased shareholder's estate to sell his/her shares to the surviving shareholders using the proceeds of the life policy. The agreement should also include a periodic policy review mechanism to ensure cover reflects the company's share valuation.
For further information on Cross Option agreements and other services BakerLaw offers to its commercial clients, please do not hesitate to contact the Head of BakerLaw's Company Commercial Department Jonathan Craig at firstname.lastname@example.org or telephone 01252 730 754.