Amid the time-consuming, complex business of running a company, scant attention is paid to what might happen if a shareholder dies, or becomes seriously ill.
In the interests of financial security, business stability, and continuity – particularly for private limited companies where there may only be a small number of principal shareholders – it is essential to provide a safety net following the loss of a shareholder:
- Shares may go to the deceased’s family, which has no interest in the business and would prefer a cash sum
- The company or other shareholders will want to retain control by buying lost shares – but may not have the resources to do so
- The shares may be taken over by someone who does not share the company’s objectives – and may even be a competitor
Famous quotes containing the word protection:
“Guns have metamorphosed into cameras in this earnest comedy, the ecology safari, because nature has ceased to be what it always had been—what people needed protection from. Now nature tamed, endangered, mortal—needs to be protected from people.”
—Susan Sontag (b. 1933)