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Business Owners are unique: Is your Security Plan in place?
Their personal security is tightly tied to the success of their business and that success rests primarily in business owner's hands.
Concerns fall into 6 major categories:
- Growing the business
- Availability of capital (for operations or funding)
- Tax Savings
- Creditor Protection
- "What if?" Protection
- Business Exit Strategy
In business situations where there is more than one owner, the most important document after the company charter is the shareholder's agreement. It contains provisions for what will happen in the event of death, disability or disagreement and generally calls for the provision of insurance funds to meet these crises. They can even contain provisions on the sale of the business that allow some of the tax liability to be retained by the purchaser. This type of agreement option is called a hybrid agreement and is frequently not even considered.
Maintaining the Banker's confidence
In the normal course of business operations, companies develop relationships with their bank to insure that cash is available in the business for expansion, major expenditures and operating capital fluctuations. The job of the banker is to protect the bank's interest and any time a change in circumstance occurs, the bank reassesses their position.
Changes in circumstance can be caused by several things:
- Major Illness
- Death of an owner,partner or key employee
- Disagreements between partners
Proper insurance planning can provide liquidity that maximizes the banker's confidence.
Naturally, business owners want to protect there assets from creditors and typically the first line of defense is established through your corporate structure; Holding Companies and Trusts.
Other tools are available such as Individual or Group Pension Plans, Segregated Investments,and carefully structured ownership of assets.
One commonly misused tool is creditor insurance. Proper ownership will result in significant tax savings in the event of a death. Improperly structured plans miss the benefit.
Planning for Business Owners
Our Business Owner's Security Platform™ address all these issues as well as providing a focus on retirement planning, tax and expense saving strategies. Once retired, income management, tax minimization and estate distribution needs provide additional opportunities for benefits to a business owner. We can help. Out team has a wealth of experience, access to professional resources in specialized areas and a desire to insure that you receive the best possible advice and service form us.