We have been working on a shareholder agreement with some slightly complicated succession clauses.
(a) the company pays for insurance for the key persons associated with each of the shareholder companies;
(b) in the event of death or total and permanent incapacity of a key person:
(i) the shareholders associated with that key person only get nominal amounts for their shares; and
(ii) instead, that shareholder receives the benefit of the insurance policy.
If you are talking to someone who is a shareholder in a company with other business colleagues, please ask them if they have a shareholder agreement with succession provisions and if not, suggest they have a coffee or a sushi Tuesday lunch with us at Michael Paterson & Associates.