shareholder protection insurance offers a level of protection and reassurance to a business in the event that a shareholder becomes critically ill or dies. this type of agreement states that if a shareholder becomes critically ill and can no longer continue in the business, they have the option to sell their shares and the remaining shareholders in the business have to buy them. the cross option agreement would state clearly what options each party is agreeing to in regards to the sale and redistribution of shares, including the percentage of new shares each remaining shareholder will be responsible for. it’s best to seek advice on drafting your cross option agreement so you don’t lose business property relief in the event of a sale of shares after a death or illness.

the beneficiaries, often a deceased shareholder’s family members, may have no interest in taking over the deceased’s role in the business and may not have the experience required to fulfil such a role. in such circumstances difficulties can arise if the surviving shareholders do not have the funds to purchase the deceased’s shares. the contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice, and should not be relied upon as advice. we cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. i had no idea what to expect as i’d not been in this situation previously and laura explained everything in detail and provided ample opportunity for questions and queries; laura is obviously very experienced and knowledgeable in her field of expertise….laura responded to my communications on every occasion and resolved the issue in a timely manner.