Anwar and Abdullah recently establish a private corporation to run their computer hardware business. The two are the only shareholders, each holding 50% of the common shares. The lawyer had them set up a share redemption buy/sell agreement whereby the corporation would redeem and cancel all of the shares of the first shareholder to die, leaving the survivor as the sole owner of the company. The two co-owners are concerned that the company is a start-up with limited capital and cash-flow at present, but with excellent prospects. They decided to fund the agreement with the existing insurance policies that they own, which name their respective estates as beneficiary. Both policies have low cash values and little, if any, policy gain at present.

How should the pair amend their insurance programs to accommodate the buy/sell agreement?

Answer rating: 100% (QA)

To accommodate the buysell agreement Anwar and Abdullah should consider the following steps in amend... View the full answer