The fortunes of businesses and families often rise and fall together. As business owners we plan for the continued growth and success of our endeavor. Many of us even plan beyond our own anticipated involvement considering the succession of our business, or our equity in it, to future generations.

Shareholders' Equity Protection (Financial Instruments)
Key Person Protection

Shareholders' Equity Protection (Financial Instruments)
Consider the Impact of Death or Disability on Your Business Plans!

1. Are you planning the transfer/sale of your business to your spouse, your children, an associate or any other entity?

• What financial planning have you done for the orderly execution of this plan or for the training of new owners, buy-sell agreement, liquidity of the company?

• How would your death impact these plans? (Good Credit, Capital Gains Taxes, Finding a Buyer, Customers' Concerns, Key- Employees' Concerns, Company Liquidity, etc.)?

• How would your disability impact this plan? (Good Credit, May force the transition earlier than planned, Key-Employees' Concerns, Customers Concerns, Company Liquidity)?

2. Are you planning the liquidation of the company to reap the financial rewards of your equity?

• What planning have you done for the orderly liquidation of your company?
• How would death impact those plans (Estate Settlement Costs, Diminished Value)?
• How would disability impact those plans?

Buy Sell Agreements
If you have not established a business continuation plan...

• you could end up in business with your partner's wife, estate or descendant[s].
•  your wife or your descendants could end up in business with your partner[s].
•  you need to start with the establishment and funding of a "Buy-Sell Agreement."

The Purpose of a "Buy-Sell Agreement"
For the Deceased / Disabled:

• Guarantees a market for shares
• Guarantees full market value for the business
• Quick settlement of estate
• Provides immediate cash for family

For the Surviving Shareholders:

• Keeps family of the deceased / disabled out of the business

Provides confidence of:

• Employees
• Creditors
• Customers
• Prevents forced liquidation
• Uninterrupted business flow

How to Fund the "Buy-Sell"

• Personal resources
• Corporate sinking fund
• Borrow
• Life insurance

Key Person Protection

Does your business plan depend largely on a few Key Employees?
Who are they?

• How much would it cost to replace these people?
• How much is this person worth to the business?
• How would the Death or Disability of one of these people impact your business?
• What planning have you done to accommodate your business plan if one of these people died?
• What planning have you done if one of these people were disabled?

Key Personnel

What is the head person at your business worth ($100 per share? More? Less?) ?
Do you realize that your key personnel are among your most important business assets?

1. Ability, experience, judgment and network - your key people are your most important assets

2. A "Key Person" could be worth up to 5 times his/her annual remuneration

3. Protection of your people is essential - they are your greatest asset

• Have you insured your business against the risk of fire?
• Death is 16 times more likely to strike your business than fire is.
• How about disability?

4. How can Life and/or Disability insurance help?

Your other options are:

• Business resources
• A Sinking Fund
• Borrow
• Your investment in your financial protection from the loss of a Key Person could be as low as 2 cents on the dollar.
  
• Life and Disability Insurance are paid to the business TAX -FREE to...

Professional Community Advisory Services, Inc.
4075 Hermitage Drive
Voorhees, New Jersey 08043
Tel: 856-424-0103
Toll Free: 1-888-424-1533
Fax: 856-424-0102
E-mail: info@profcommty.com