What happens to ownership if one shareholder is suddenly gone?

A shareholder agreement can describe what should happen, but the transition still needs a practical source of liquidity. Without funding, the remaining owners, the corporation and the departing shareholder’s family can face competing financial pressures.

Planning starts by understanding who would buy, how value would be determined, when money would be required and what happens to control during the transition.

Shareholder agreements, valuation methods, insurance funding, corporate liquidity and tax/legal structure should be considered together. Legal and tax advice belongs with the appropriate professionals.