Shareholder Protection
The company or partnership agreement may decree that the deceased’s shares are bought by the remainder of the shareholders/partners. However the risk exists that the company doesn’t have, or wish to use, its cash reserves to buy the shares back.
The bereaved spouse or partner of the former director may want cash at a stressful time and may not have any practical interest in the day to day running of the company. You can easily see that a difficult situation could develop if the shares cannot readily be bought back. Would you relish the though of your co directors spouse joining you on the board?
We would need to understand your shareholder agreement or partnership agreement to advise your firm properly.
Please feel free to call us on 0845 602 6032 for a more in depth chat.