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Cross Option Agreements

When business owners first set out on their corporate venture, they are not usually thinking about the loss of one of their members. But the unexpected death of a shareholder can cause significant issues for a business if estate planning was not a part of its initial or ongoing corporate strategy.

A Cross Option Agreement provides shareholders in a company with a mutual option to acquire the shares of each other in certain circumstances, typically after the death of one of the shareholders.

The Cross Option Agreement is often linked to life policies which are held in trust. At Glanvilles, our team of specialist corporate law solicitors have wide experience in preparing the appropriate Cross Option Agreements and Trust Deeds to document these arrangements.

For bespoke advice about Cross Option Agreements, contact our corporate law solicitors in Chichester, Fareham or Havant, or fill in our online enquiry form and a member of our team will be in touch shortly.

What is a Cross Option Agreement?

When a shareholder dies, your Shareholders Agreement (if you have one) or your Articles of Association may include provisions on how to deal with the aftermath. However, if these documents do not contain such provisions, the deceased shareholder’s shares will usually be inherited by their beneficiaries according to their Will or the Rules of Intestacy.

A Cross Option Agreement protects the surviving shareholders against the difficulties caused by this eventuality. The Agreement will typically be linked to the deceased shareholders’ life policy which is held on trust for the surviving shareholders. Upon the death of a shareholder, the Agreement can require the estate to sell the shares to the surviving shareholders using the funds from the life policy. 

The Agreement should be regularly reviewed to ensure that the level of policy cover reflects the company’s most up-to-date share valuation.

Our Cross Option Agreement solicitors’ expertise

Whether you are just setting out on your commercial venture or you own and/or operate an established business, there is never a wrong time to start thinking about shareholder estate planning.

Our specialist corporate lawyers advise all types of businesses, including start-ups, partnerships, owner-managed businesses, SMEs, and large regional and national corporations.

We can help you put in place the measures you need to protect and promote your personal interests and the interests of your business. This includes expert advice about a Cross Option Agreement. Our practical service covers:

  • Drafting and reviewing Cross Option Agreement documentation and advising on the terms.
  • Drafting Trust Deeds linking life policies to Cross Option Agreements.
  • Implementing a Cross Option Agreement upon the death of the shareholder.

As well as our Cross Option Agreement expertise, we have a vast array of corporate law and personal legal expertise and can help business owners put in place the necessary provisions to protect their interests in every possible scenario. This expertise includes other corporate estate planning measures, such as Company Wills and Business Powers of Attorney.

Why choose Glanvilles’ corporate lawyers?

Our team of corporate law solicitors deliver the highest quality of legal advice backed by years of practical experience. We combine our all-inclusive service with impeccable levels of client care to ensure that your experience with us is not simply informative, but welcoming and reassuring.

Although we advise on aspects of corporate law and work with your business interests at heart, we still appreciate that Cross Option Agreements are ultimately created to help during a professionally and emotionally challenging time. For example, as well as adapting the business to operate without the deceased shareholder, you may also be grieving the loss of a friend and respected business colleague. We will therefore aim to get to know your business, your needs and your goals, so we can provide bespoke solutions and help you put the very best protections in place.

Our specialist team includes Partner, Lance Terry, who has a wide range of expertise handling corporate transactions.

We also have Associate, Scott Richardson, who advises across an array of sectors. If you are an early stage business or start up near Chichester, Scott is able to offer a free no-obligation 30-minute consultation to discuss your legal requirements and recommend a course of action. You can email Scott directly at scott.richardson@glanvilles.co.uk.

The Glanvilles client service promise

When you use our corporate legal services, we promise:

  • To respect you and be friendly and attentive to your needs.
  • To always listen to your concerns and provide robust solutions.
  • To be transparent about our costs from the outset.
  • To answer your phone calls and emails as soon as possible.
  • To provide regular updates throughout your time with us.

Glanvilles LLP is Lexcel accredited by the Law Society in recognition of the high standards of our practice management and client care. We are independently regulated by the Solicitors Regulation Authority (SRA).

Get in touch with our corporate law solicitors in Hampshire & West Sussex

For bespoke advice about Cross Option Agreements, contact our corporate law solicitors in Chichester, Fareham or Havant, or fill in our online enquiry form and a member of our team will be in touch shortly.