When you’ve built a business with others, protecting your ownership and ensuring continuity is vital — especially if something unexpected happens to a fellow shareholder.
Shareholder Protection is a specialist form of insurance that helps business owners retain control of their company if another shareholder dies or suffers a critical illness. Without it, surviving owners may find themselves working with beneficiaries who have little knowledge of the business — or struggling to buy out their share.
Why Shareholder Protection Matters
If a shareholder passes away, their shares typically pass to their beneficiaries — often a spouse or children. These individuals may not have any experience in the business, which can lead to complications, uncertainty, and even conflict.
Most businesses don’t have the spare capital to buy out those shares quickly. That’s where Shareholder Protection comes in — providing the funds needed to purchase the shares and maintain stability.
How It Works
There are several ways to set up Shareholder Protection, each with its own tax and legal implications:
• Company-Owned Policy
The business owns the policy and uses the payout to buy back the shares. This must be permitted by the company’s Articles of Association.
• Own Life in Trust
Each shareholder takes out a policy on their own life and places it in trust, naming the other shareholders as beneficiaries.
• Life of Another
A shareholder takes out a policy on the life of another shareholder. Ensuring funds are available if that person passes away or becomes critically ill.
It’s essential to involve your accountant and legal adviser to ensure the structure suits your business and complies with relevant regulations.
Our Approach
At One Roof Financial, we work closely with all parties — including legal and tax professionals — to ensure your Shareholder Protection is set up correctly and efficiently.
If you don’t own 100% of your business, this type of cover is worth serious consideration. It’s not just about protecting your investment — it’s about securing the future of your business.
Want to explore your options?
For more information or to book an appointment with an adviser. Call us on 01455 63 61 63 or send us a message https://onerooffinancial.co.uk/contact/
Blog written 16/09/2025
The information contained within this blog was correct at the time of publication (16/09/2025), and is subject to change.
