The aim of this private trust is to ensure a smooth transition and succession of business interests i.e. it can help prevent a business from being stale or frozen, following the departure of a business partner or the unexpected loss of a key person, thus to protect the viability of the business in the long run. Therefore, it is important for business owners to have a written agreement, called a Buy-Sell Agreement made between them to buy or sell their shares/business upon death or disability, coupled with a trust deed. The trust deed ensures that the interests of all the parties are protected.

• Upon the disability or death of the shareholder/partner, ownership of the shares/interest is passed to inexperience/unqualified heirs. 
• There is difficulty in selling the deceased’s share at fair market value especially when it is a specialized field or when the surviving shareholders/partners are delaying to make reasonable offers for the shares/interest. 
• Lack of cash to pay the deceased partner’s debts & other financial obligations. 
• The management is disrupted by inexperience/unqualified heirs who may wish to manage & become active or they may sell ownership to an outsider or even competitors. 
• Creditors may no longer extend credit facilities to supply services/goods and begins to insist on immediate payment due to instability of the company/business they deal with. 
• Profits maybe low and there is uncertainty about the future success of the business, especially when inexperienced/unqualified heirs take over.

This solution is suitable for partnerships and small/medium sized corporations, in which the parties will execute a Buy-Sell agreement and trust deed by appointing OSK Trustees for the distribution and assignment purposes. The deceased partner’s share will be sold to surviving owners at a fair market value that have been agreed upon earlier by all the owners. The fair market value can be periodically reviewed as agreed by the parties.

In order to facilitate the purchase of the shares/interest of the deceased by the surviving owners, usually life insurance policies are used. Each shareholder/partner is the applicant and premium payor and the assignee of the insurance policies is OSK Trustees. In the event of a shareholder’s death or total and permanent disability or serious illness, OSK Trustees will use the policy proceeds to purchase an equal share of the former shareholder’s interest and the business interest/shares are passed to the surviving business owners.