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As independent financial advisors linked to a long-established
accountancy practice, we are ideally placed to provide
comprehensive financial advice to business clients.
We will arrange a suitable initial meeting to look at
your current circumstances. This lasts about an hour,
is completely free of charge and without obligation.
During this we will take down information about the
four main areas of financial concern – Protection,
Investment & Savings, Pensions, and Commercial Mortgages
& Borrowing – and the aim of the meeting is
to establish aims and objectives for both you and your
company, together with your hopes and aspirations for
the future. We will then agree a course of action and
to provide you with suitable solutions to try to fulfil
both your personal and business financial expectations.
A selection of the products we may discuss with you
appears below but please Contact
Us so we can tailor these exactly to your wishes.
If you are in business, failure to protect your
company, partnership and key staff could have disastrous
implications in the event that one of you dies prematurely
or becomes ill and could not work. Here are some different
scenarios that you should consider.
The death or permanent disablement of a shareholding
director could have a serious impact, both on the future
of your business and on your family. So what are the
main points you need to consider?
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Majority shareholders may have important voting rights that directly
affect the running of the company. In the event of a majority
shareholder’s death, these rights would normally pass to
the deceased’s dependants. This could affect the company
in two ways:
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The dependants now have the right to
a say in the running of the company. But do they have the
necessary experience? And will they share the objectives that
the surviving shareholders have for the business?
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They might prefer to receive the value
of the shares in cash. But who will buy them? Unless the other
shareholders have sufficient liquid capital reserves, they
may be sold to a, possibly hostile, third party, perhaps even
a direct competitor.
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Generally, it is the voting rights attached to a shareholding in a private limited company that gives them their market value. Minority shareholdings may not have significant rights and so the shareholder’s dependants may inherit shares that are virtually worthless. The only likely buyers of such a holding would be the surviving shareholders, but they may be under no obligation to buy.
The simple answer to both of these scenarios is shareholder protection. A legal agreement is signed by all of the shareholders, who agree to sell their shares in the event of their premature death and an insurance contract/s provides money for the surviving shareholders to purchase the deceased shareholders equity.
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As your business is ultimately your people, its continued success may also depend on the special contributions made by a small number of ‘key’ men and women. Your fellow directors or partners should also be regarded as key people. The death or disability of any of them could threaten your company’s profitability. Indeed, its very survival could be at stake: The premature death of a key employee is likely to cause an immediate requirement for cash, so life assurance should be a top priority. However, it is not just the death of a key employee that can create serious financial burdens for your company. Today, many serious illnesses, such as a heart attack, stroke and cancer, no longer result in death but require lengthy periods of convalescence. A key man insurance contract can be written on the lives of key staff that would provide money for this eventuality. Tax-relief may be available on premiums for this type of insurance.
In a fiercely competitive employment market, it is often
the quality of the “package” that comes with a job
that attracts and retains staff, which often includes life assurance,
critical illness, income protection and private medical insurance.
We can use our expertise and experience to provide you with the
right advice for your company.
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When you’re in business, from time to time there may be surplus cash available for investment, and depending upon your immediate cashflow and needs, some of this may be better invested in alternative schemes. Deciding which short, medium or longer term investment to use can be bewildering.
We can guide you through all the various savings
and investment schemes available, and help you select
the most appropriate type for your needs now and
your hopes for the future for both you and your
business. Built in to this we will work closely
with your accountant to maximise the tax-efficiency
for your business.
Some of the possible areas for investment are as follows, but we will tailor our advice to each individual business’ requirement:
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There
are an infinite number of possibilities available with financial
institutions throughout the UK. The return on these investments
tends to be low and their real value eroded by inflation.
This type
of investment is suitable for businesses who are looking for a
better return over the longer term than deposit accounts such
as bank or building society accounts, as detailed above.
A unit-linked investment bond invests your capital in underlying
stockmarket-based funds and other assets. With each product provider
there is a wide range of investment funds to help you achieve
the balance you require between security and growth potential.
Your lump sum is used to buy units in your choice of one or more
of these funds. Your returns are directly linked to the performance
of stocks and shares and other assets in which the funds are invested.
Investment bonds do not normally have a fixed term, but sometimes
have withdrawal penalties in the early years.
Many investments can be effected outside mainland UK, e.g. in
Jersey, Guernsey, etc, which means they can pay income gross.
This may have the effect of deferring or removing certain tax
liabilities.
PLEASE REMEMBER THE VALUE OF ANY INVESTMENTS LINKED TO THE VALUE OF THE STOCKMARKET MAY FALL AS WELL AS RISE AND YOU MAY NOT GET BACK THE FULL AMOUNT YOU INVESTED.
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One of the main areas of financial planning is to ensure the provision of an adequate income in retirement. This is an area that we are committed to advise upon. If you are an employer with 5 or more employees, you must by law offer a stakeholder pension scheme for your employees, although there is no compulsion for them to join, or for you to make any contributions. However, in today’s competitive employment market, it is often the quality of the “package” that comes with a job that attracts and retains staff, and this of course may include pensions and associated other benefits. We can use our expertise and experience to provide you with the right advice for your company.
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You may not have made sufficient planning so that when you decide to put you feet up and pass on the business to someone else. So too often an expectation that your business will provide you with enough money in retirement does not become a reality, so why put off making a provision, when you could get up to 40% extra contributions in tax relief (dependent upon your tax regime). With changes in pension legislation from April 2006, you may also wish to review any existing arrangements to check these are still suitable.
SIPPs are becoming increasingly popular for those who do not wish to be limited to a range of insurance company funds for investment of their pension funds. Essentially they are Personal Pensions, but they can provide much greater investment flexibility than can be achieved under a traditional insured pension.
You can invest in stocks and shares, cash deposits, commercial land and property, corporate bonds, fixed interest securities, unit rusts and a variety of other investments as well as insurance company funds. Purchasing commercial property and land via a SIPP is a popular option for many people, as it allows the property to increase in value over the years with no capital gains tax, or tax on the rental income.
In some cases it can be suitable for a ‘group SIPP’ arrangement to be established, which would allow future generations to join in.
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Whether you are starting out in business, or have been established for some time, you may need to raise capital for a variety of reasons.
At Essex Abel, we have a number of first-class
local and national contacts with banks and other
financial institutions to enable us to help provide
you with suitable advice, (working in connection
with these partner firms).
Hand in hand with the provision of finance your business comes the need to protect the loan repayments if you should fall ill or in the extreme event of your death which could materially affect the profits of the business. Please see our section on business protection for ways in which we can help you.
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If you are planning to raise finance to buy business premises, it may be beneficial considering who owns this asset, and whether or not it may be beneficial to include this in your retirement planning. Let us provide the advice to make
this work to your advantage.
There may be a fee for mortgage advice. If so, the precise amount will depend on your circumstances but we the normal charges we apply are £250, in addition to the receipt of any introducer or procuration fee received from the lender.
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