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Your wealth in good company

Wealth is not only created by investing your savings but also by limiting the loss of money due to a lack of experience, time, knowledge and proper financial advice. Save yourself valuable time by allowing the team at Delfin to share with you our experience, knowledge and approach to understandable and transparent financial advice.

Business Planning

Business Planning

As a business owner you work hard at the success of your enterprise but unfortunate and unplanned events can derail the stability of your business.  Some of the more important issues for consideration are:

Buy-and-Sell agreements

(Transfer of ownership in the event of death and permanent disability)

In most cases the death of a co-owner of a business causes problems for the remaining owners, business partners, family of the deceased and/or the dependants of the deceased. The family of the deceased wants to receive value for the deceased’s share, while the remaining owners need to ensure that they have sufficient funds readily available to acquire the deceased’s share.

If the remaining owners are unable to buy the deceased’s share, the executor may have to transfer the interest in the business to the deceased’s heirs. This may force the remaining owners to take in an inexperienced business partner or co-owner whom they otherwise would not have considered.

A buy-and-sell  agreement addresses the needs of remaining business owners in the event of death and permanent disability, simultaneously also addressing the needs of the deceased owner’s dependants. It leaves no uncertainty of what should happen to the deceased's business share that took a lifetime of hard work to establish and build up.

Key person insurance

Many small- and medium-sized businesses depend heavily on a particular director, partner or employee for the success of the business.

The business could suffer a severe financial loss in the event of such a person dying or becoming permanently disabled.

Credit Loan Account and Business Contingency plans

Business owners often lend substantial amounts of capital to the business. This creates credit  loan accounts in favour of the owners, i.e. the business owes the owner an amount of money. In the event of the death or disability of the owner, the business has to repay the money to the estate of the deceased owner and should the business not have the cash, it could have a serious effect on the liquidity of the business.

Business contingency plans refer to the situation where shareholders have signed surety for money lent to the business from a bank. This could incur personal liability in the following instances:

• During his lifetime if the business cannot repay the loan to the bank
• On his death if the business cannot repay the loan to the bank or find alternative security.

Employee Benefits

Businesses spend time and money on finding and training the right employees. It is important to retain these employees. Offering good employee benefits such as membership to a retirement fund, group risk fund or a medical aid could position the business favourably to attract and  retain quality employees.