A young business was growing strongly and headed for great things. The joint owners James and Mark had worked very hard and invested long hours to build a strong foundation for the future.
James and Mark had been contacted by their DAB Financial Group Client Manager, Jemma when the draft accounts for their most successful year had been prepared. During the meeting Jemma congratulated them on their success and as their dedicated advisor posed a series of questions that neither owner had ever considered.
“What would happen if one of you died or suffered a serious medical event? What would happen if one of you developed a mental illness or addiction? If such an event occurred would the business itself survive or could it bring down both partners financially?
Even if the business did survive would the remaining partner want to be in business with the spouse or children of the impacted partner and not be the sole decision maker?”
Realising the exposure, James and Mark asked Jemma to develop a team resourced from the DAB Financial Group specialists to build a cohesive recommendation and avoid the need for the owners to engage multiple independent advisors.
Jemma introduced James and Mark to the DAB Financial Legal counsel to construct a shareholders agreement detailing the obligations of both James and Mark to each other and the business, the ability of the unaffected partner to gain control of the entity to ensure the firms continued survival and a process by which the impacted partner would receive fair compensation for their interest in the organisation.
Once this was completed, Jemma asked both the DAB Financial Wealth and DAB Insurance Advisor experts to put together an insurance recommendation strategy for Life, Total and Permanent Disablement, Keyman and business expense insurance.
The development of this recommendation was co-ordinated with DAB Legal counsel and the terms of the shareholders agreement.
Finally, the insurances were structured with the input of the DAB Financial Tax Advisor specialist to ensure that the tax efficiency of the insurance plan was optimised for the business
James and Mark now felt confident that the business they had worked so hard to form, grow and strengthen was protected. In addition, they were able to ensure that one partners personal decisions would not necessarily mean financial ruin for the other partner.
They also had a structure through a carefully drafted shareholders agreement to attract new investors and key employees to maintain the growth trajectory of the firm.
Guided by their DAB Financial Group Client Manager, James and Mark could now go back to doing what they did best with an even higher degree of confidence in their financial future.
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