Specialised insurance

[wales01man]

Need somehelp here if i can get some a strange one this?

My sons boss who is sole director of a ltd company has suggested son takes out some sort of insurance which would pay out on the owners death a sum that would be sufficient for the purchase of company shares that would go to his wife

Any help appreciated

[R0b]

des8 might be best to answer this but I think the director is referring to shareholder protection insurance. I have no idea how that works and if it overrules the usual rules on death and transfer of assets.

[des8]

If the current owner is the sole shareholder I don't think shareholder protection insurance will be available.
I really think your son should speak with a business protection specialist

The first problem that comes to mind is if the owner is the sole director (and sole shareholder?) what do the articles say (if anything) about how a new director will be appointed.
The company cannot function without a director
Typically directors are appointed by shareholders, but if sole shareholder has died..........
In that case shares are vested in the executor, but he needs to be registered as shareholder before he can appoint a new director.
However,as there is no director there is no-one who can update the company's register of members to list the executor as the new shareholder.