Corporate life
insurance.

It's an agreement between partners stating that, on the death of one of them, the survivors may (or must) buy back their shares at a predefined price. Life insurance funds that buyback - the company or the surviving partners receive the necessary capital exactly when they need it.

In a cross structure, each partner holds a policy on the others' lives. In a corporate structure, the company is owner and beneficiary of the policy. The tax implications differ by structure. Alexandre analyzes with your accountant to choose the right approach.

As a rule, no. A partial deduction may apply in specific cases, for example when a lender requires the policy as security for a business loan. The tax value mainly lies elsewhere: the death benefit received by a private company is generally tax-free, and the portion above the policy's adjusted cost basis can be credited to the Capital Dividend Account (CDA), then paid to shareholders as tax-free capital dividends. Confirm with your accountant based on your structure.

The Capital Dividend Account (CDA) is a tax account of a private company that grows when it receives certain non-taxable amounts, including a life insurance death benefit minus the policy's adjusted cost basis. The company can then pay these amounts to shareholders as tax-free capital dividends, provided the required election is filed. It's a significant tax advantage of company-owned life insurance, to confirm with your accountant.

The amount depends on the key employee's contribution to the company's revenue, the estimated cost of replacing them (recruitment, training, lost clients) and the time needed to stabilize operations. Alexandre uses a structured formula with your accountant to set a defensible amount.

No - a key person policy can exist independently of an agreement. But if the goal is to fund a share buyback, an up-to-date agreement is essential for the strategy to work. Alexandre works with your notary or lawyer to ensure both documents are consistent.

The policy stays in force, but its purpose changes. It can be transferred, bought out by the departing partner, or repurposed for a new corporate goal. A policy transfer can have tax consequences, to confirm with your accountant. Alexandre reviews the structure at every ownership change.

It varies with the amount requested and the medical exams required, but expect a few weeks generally. Alexandre coordinates the process with your accountant to avoid delays.