Financial Planning
Companies require specialist financial advice because of the complexity of the corporate and tax laws which affect them. There are a range of sensible financial planning areas which relates to corporate organisations. These are:
Employee Benefit Schemes
Directors and staff benefits
As companies operate in an increasingly competitive business environment, the need to find other ways of retain staff loyalty cannot be under stated. Recruiting, motivating and retaining able staff is a key preoccupation of any business and getting the rewards mix right and at the right price can make the difference between success and failure.
Remuneration menus made up of a stake in the business, retirement and death benefits, tax efficient bonuses and perhaps tangible rewards such as a company maintained car or car allowance are common in well-managed businesses. But they require careful planning and selection depending on the type of business and the type of staff who are involved. For instance, what motivates and retains staff in start-up businesses is likely to be significantly different to what motivates staff in a large conglomerate. If good staff is the key to a successful business, then reward strategies with intelligent and effective balance are vital.
Taking the right advice early on can mean that you can make the right moves sooner rather than later.
Protection planning
Business insurance (General)
There are many aspects of business insurance to consider when running a business. This include buildings and contents, employers liability, professional indemnity, business disruption, public/products liability, goods in transit, deterioration of stock, consequential loss, all of which could affect the office, factory, vehicles and staff.
Key-Person Insurance
Directors and employees with specialist skills or knowledge are key employees of the companies they work for as they make significant contribution to the success of the company. Therefore, to lose one through death or incapacity can be extremely damaging to the business of the company. That is why taking out a key-person insurance to protect the company can be a wise move.
Key-person insurances can provide several tangible benefits which include:
- Paying the costs of a temporary replacement.
- Meeting the costs of recruiting a permanent replacement.
- Covering the value of lost business during a very emotional period.
The scope and amount of cover arranged will depend on the value that the employee in question has to the employing company, but companies ignore the risks of losing key staff at their peril as Creditors, suppliers and customers may not be very understanding of the dilemma the company has found itself in.
Share protection through life assurance
Owners of businesses usually have vision, goals and plans for their business however; they very rarely give careful consideration to the impact of a co-owner, Director or Partner dying or becoming incapacitated unexpectedly. In the event of such calamities, there can be the risk that the remaining director(s) or partner(s) may not have sufficient funds to hand either to sustain the business or to buy out the next of kin of the deceased or incapacitated co-owner.
A solution to this problem is to take out life assurance protection to provide a source of funding. Directors' or partners' share agreements can then the created around such a plan to provide for the remaining director(s) or partner to purchase the shares of the deceased or incapacitated co-owner.
The effective planning involved would normally require your financial adviser to work in conjunction with any other advisers to the business, such as the accountant.
Pensions & raising capital
Directors may prefer to establish a separate pension plan from that of their employees. There are many reasons for this such as the term of their employment may be a fixed number of years, their tax position may be more complicated than that of other employees or they may have a greater understanding and experience of the investment arena.
Directors and partners may also at a future date wish to leverage in a tax-efficient and cost-efficient manner the monetary value in their company pension scheme as a way of raising valuable funds to expand the business or to acquire business premises.
There are a range of options available and it is prudent to seek expert advice.
Legal disclaimer
These pages provide generic information about various aspects of financial services advice that we provide as well as possible areas of clients’ financial planning needs. We hope they are helpful to you but they do not, on their own, add up to proper investment advice and we cannot take responsibility for anything you do in reliance on them without further discussion with us. Please do not make a decision based upon the information contained within these pages alone. They are not detailed or comprehensive enough to enable you to make an informed decision which is tailored to your circumstances and needs. Please contact us now for tailored advice.