Net Net TOUGH-How to Buyout Your Business Partner. On Death or Disability.
Bonus Course – Your Business Partner Dies or is Disabled
Business owners of businesses that have more than one owner, this 2 minute course is for you!
- Setting up a partnership with someone?
- Already partners, but are so busy, no time to do (or have done) any planning?
- “We have a partnership agreement but it is brief, old or it is NOT signed”?
Does any of this sound like your/your situation?
Here are 7 steps to reviewing your business partnership situation:
- Do you have a partnership agreement, does it’s details reflect the size of your business and is it signed?
- What does the partnership agreement say about when one partner dies, becomes disabled or critically ill?
- How long do the able body partners have to keep paying the disabled partner a salary, dividends, perks?
- When will the able body partners buy out the disabled partner – 6 months, 12 months… longer?
- Consider, if no planning is done, do you want to be partners with your partners SPOUSE, or EX-Spouse?
- What does YOUR and your partners WILL say about the ownership of the shares you each have?
- Would your business run without your partner? Could you improve any processes?
Have you done up a partnership agreement, but you either don’t know what it says or don’t understand it – let me know, I will review it for FREE! Contact US
Strategy Session – Using Cost Effective Term Life Insurance to Buy Your Partner Out
The most common planning scenarios I find myself in is partners of a business
One thing that’s overlooked in partnership agreements is, what happens if one partner died or become ill? What happens to the shares if a business partner passes away and he/she has three other partners?
Do all those three other guys or women want to be partners with that deceased persons wife/husband? Or worse yet, that particular partner is injured or ill and can’t actually come to work, so the three able bodied partners are all paying still the salary of the partner who’s who’s not contributing to the business. When there’s dividends distributed depending on the structure that disabled partner could be entitled to dividends?
How long would you keep that disabled partner on the payroll?
How long would you let that partner still be a partner if they’re not contributing?
Why not get that situation laid out ahead of time. A partnership group could chose to pay the deceased partner’s family out using – savings, a loan, business earnings or a life insurance policy.
There are insurance policies that actually fill those gaps in a partnership scenario. The policies are relatively inexpensive to solve a huge problem! A simple term life insurance policy is an efficient strategy to keep the business going with the least amount of interruption and be lucrative for the surviving partner.