Business Value Protection Trust

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I need to find an exit for my shares when I am not around.

A well-constructed plan is essential to protect the value of the business and provide cash for the family in the event there is a major disruption in the business due to a co-owner’s death, disability, retirement or serious major illness or any other event that jeopardizes the continuity of the business.

Ask yourself:-

  • If a co-owner dies today, can you work with his family to run the business?
  • Will the co-owner’s family members know how to run the business with you?
  • Can they work well with you?
  • Would your beneficiaries be able to get a fair price?
  • Do you have the funds to buy out the co-owner’s shares/interests from the family members when there is no pre-agreed price in a written agreement?
  • Can the shares/interests you are purchasing be transferred quickly to you?

PROBLEMS WITHOUT BUSINESS PROTECTION PLAN

Often these are:-

  • A new partnership is created due to the inheritance of the shares/interest by inexperienced heirs. Chances are this new partnership may fail.
  • There is no pre-agreed price for any sale to take place when the heirs decide to sell to the other co-owners. As a result, it may take years to settle a transaction price.
  • Some of the unqualified heirs may insist on being directors of the company and be active in running the business. This may lead to serious disruptions and disputes within management.
  • It is possible that the co-owners may decide to abandon the business and start their own due to disputes with the heirs.
  • Loss of profits and uncertainty about the business future success.

After all your hard work in building your business, you need to avoid such problems.

THE SOLUTION – UBIZ: BUSINESS VALUE PROTECTION TRUST

Our UBiz ensures a smooth transition of the business to the other co-owner(s) and the value of your share of the business is protected against an event such as:-

  • Death
  • Bankruptcy
  • Incapacity
  • Divorce
  • Ill health
  • Loss of professional license
  • Retirement
  • Deadlock between co-owners

Our UBiz consists of:-

  • Buy-Sell or Cross Option Agreement: covering the terms of the sale and purchase including the agreed value or formula, events triggering a sale, funding and mode of payment.
  • Power of Attorney: authorizing us, Rockwills Trustee, to transfer the shares/interests to the other co-owner(s) upon the occurrence of the agreed events that trigger a sale.
  • Trust Deed by the co-owners: instructions to Rockwills Trustee regarding the periodical distribution of the sale proceeds to prevent these being misspent by the beneficiaries.
  • Life insurance policy: as the main funding mechanism to purchase the shares/interest of the outgoing co-owner.

How to set-up?

UBiz chart

ADVANTAGES OF UBIZ

  • Guarantees the sale of shares/interest at a full and fair value that was agreed by co-owners.
  • Prevents inexperienced and unqualified heirs from being involved in the business or the selling of the deceased’s shares to outsiders.
  • Smooth transfer of ownership to the co-owners is ensured by the Trustee.
  • Using life insurance, the purchase of the shares/interest becomes very affordable, minimizing the need to use your savings for the purchase.
  • Rockwills Trustee acts as the Trustee for UBiz protecting the interests of your beneficiaries and that of the co-owners.
  • Shares/interests are easily converted