Читать книгу Start & Run a Coffee Bar - Tom Matzen - Страница 93

If it is your intention to have a partner in your coffee bar or a shareholder in your corporation, you may wish to consider shareholder’s or partner’s insurance. Usually this type of insurance is part of a buy-sell agreement that allows for a deceased shareholder’s or partner’s interest to be purchased by the surviving partners or shareholders of the corporation.

In summary, the procedure is that each partner shareholder applies for a life insurance policy on the life of the other. The applicant is the beneficiary and pays the premiums on his or her partner’s life insurance policy. When a partner dies, the funds from the insurance are received tax free by the beneficiary (the partner). These funds are then used to purchase the deceased partner’s share of the business. The surviving partner retains control of the business, and the heirs of the deceased get cash for their interest.

In the absence of a buy-sell agreement funded by life insurance, the death of a partner could cause the immediate dissolution of the partnership in law. Unless there is an explicit agreement to the contrary, the surviving partner’s duty is to liquidate the business, collect all outstanding accounts, pay off all debts, and account as trustee to the personal representative of the deceased partner for the value of the deceased’s interest in the business.

With a corporation, in the absence of a buy-sell agreement, the deceased shareholder’s interest would be considered an asset and would go to the beneficiary outlined in the deceased shareholder’s will, if a will existed. Naturally, the introduction of a new shareholder who owns an interest in the company, especially a majority interest, could have a very traumatic effect on the shareholders and the company’s continued operation.