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Gerald McMichael. Jeff Shupe. Perpetuating your business. A planning guide for a successful exit strategy. Perpetuating your business. A Shareholder Agreement is ESSENTIAL  Addresses the transfers of shares Typically accomplished through stock redemption

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perpetuating your business

Gerald McMichael

Jeff Shupe

Perpetuating your business

A planning guide for a successful exit strategy

perpetuating your business1
Perpetuating your business
  • A Shareholder Agreement is ESSENTIAL
    •  Addresses the transfers of shares
    • Typically accomplished through stock redemption
    • Covers what happens in an involuntary departure of shareholder such as:
  • Condition of shareholders:
    • Death of shareholder
    • Disability of shareholder
    • Financing Method:
      • Life Insurance
      • Disability Insurance
  • Insurance for key employees
    • Key-Man Life Insurance
    • Business Overhead Insurance
five basic methods of perpetuation
FIVE BASIC METHODS OF PERPETUATION:
  • Method:
    • Transfer/Sell to family member……………….36%
    • Sell to a 3rd party……………………………..…42%
    • Transfer to existing partner……………………17%
    • Merge, then retire………………………………..2%
    • Retain business until death…………………….6%
    • Other…………………………………………..…...3%
directors and officers liability policy benefits
Directors’ and officers’ Liability Policy benefits
  • Covers “Wrongful Acts”
  • Covers business interference and market misrepresentation
  • Coverage for breach of contract and fiduciary duty
  • No discrimination exclusion applies in standard policy
  • Provides defense for wrongful enrichment claims
  • Provides defense coverage for claims related to fraud, criminal, or willful conduct until proven
  • No built in exclusion for professional services
  • Definition of insured includes directors and officers, spouses and domestic partners, and employees
  • No retention applies if no finding of liability