Most SME businesses in Singapore are formed under partnership or with multiple shareholders. Most entrepreneur are busy running the business and most likely ignore the planning their exit strategy in the event of death of their partners(shareholders) or themselves.
Without proper Business Exit Strategies – The following may impact you or your estate:
- Your estate is made liable for your business debts
- Your business partners may not be able to afford to buy out your shares in the company
- Your inexperience spouse is “force” to take-over your business
- The value of the business would depreciate due to inexperience beneficiaries
- In the worse scenario, your company have to be sold due to no succession planning
As an entrepreneur, you don’t want to face this situation. And you won’t need to if you have a Business Value Protection Trust (BVPT) in place
Business Value Protection Trust provides the following benefits:
- Valuation of the business and death as a trigger event is stated in this arrangement
- It guarantee the sale of the business between the deceased and surviving partners(shareholders)
- A smooth and quick transfer by the Trustee
- It can convert non liquid business interest provide liquidity: those share that can’t be converted to provide money for family
- Business owners can run the business without interference from the family of the deceased partner(shareholder)
- Heirs are free of the hassles of managing a business they don’t know while at the same time guarantee an income.
- With the right condition specified in the trust it prevents beneficiary from misusing or misspending which the seller works so hard for
Get your free consultation from our dedicated Rockwills Estate Planner now.