Future and Personal Liability

The benefits of having a future liability plan in place is:
1) Contributions are made from under utilized cash reserves.
2) The business can grow its investments through diversified portfolios.
3) Tax write-offs can be channeled into replacing capital equipment.
4) The business can take care of future liabilities that may arise.
5) Cash reserves are used to the benefit of the company.

Personal Liability:

Debt and business seem to go hand in hand, but can be quite challenging if the business debt is linked to one or more of the partners in the business.

For example, if one or more of the owners signed surety for business debt, the impact on your business can be severe if that person becomes disabled or dies. This could possibly result in the bank calling up the full amount owed by the business.

Equally important is the impact on the estate of the business owner. The estate could be held liable for the outstanding debt.

Business owners should make the necessary provisions for unforeseen circumstances. One should have a personal liability plan in place, with this plan:
1) The debt is settled with the lump sum from the policy.
2) Creditors are reassured that the business is viable and capable of meeting its financial obligations.
3) The business continues to deliver on its service agreements.
4) The proceeds of the policy will not be subject to estate duty or capital gains tax, provided all legal requirements are met.

This plan will give you peace of mind, knowing that the business can take care of its outstanding debts should anything happen to the person that signed surety.

“Do not let life find you unprepared”

Shirley Brewer