Have you secured your legacy?

Do you currently have an updated Buy and Sell agreement? This is an agreement between shareholders that stipulates in detail what the process is if one of the owners unexpectedly dies or becomes capitally disabled.

Has sufficient provision been made to finance the purchase price as agreed in the buy and sell agreement? This is usually in the form of life and disability insurance and is one of the most cost-effective ways to raise substantial amounts of capital. If this is not the case, the whole execution of the buy and sell agreement will be at risk.

When last was your business valuation certificate updated? This is the agreed purchase price.

Have all the tax consequences been considered and appropriately addressed in the planning process, agreements and provisions?

Is a trust one of the shareholders and has the effect of this been correctly treated?

If your answer is no to any of these questions, then you urgently need to attend to this and acquire expert advice.

Buy and sell arrangements that are correctly structured – with the correct funding solutions and updated regularly – will prevent a whole host of problems and create guaranteed certainty, especially in times of grave uncertainty.

Plan for your business continuity while you are still able to do so. This protects the family of the deceased and guarantees that hard earned value won’t be lost. It protects the remaining partners, as business continuity is secured and all negotiations are completed while all the partners are still alive and able to implement it.

Jacques Hodsdon –  MCom Tax | CA(SA) | CFP ®   is a Director of Affluence Group and specialises in Investments, Personal and Business planning

For enquiries contact, jacques@afgroup.co.za or 0823011332