I would always recommend that cross-option agreements be entered into by owner-managed businesses. They prevent the activity of the company in the event of death or serious illness. A cross-option also ensures security by ensuring that the family of a deceased owner-manager has a cash buyer consenting in the event of death, rather than a share in a business they don`t need or want. If one party wishes to exercise its choice, the other party must comply. Options can only be exercised after death and there will be a certain option period. As a general rule, an option agreement would also include various other provisions relating to the agreement with regard to value, as well as various administrative provisions. In the absence of a fixed price or a formula of the value of an interest, the agreement would normally provide for the appointment of the expert, who will generally be a practicing accountant appointed by all parties or an accountant designated by the authority of the party exercising the option. There are four agreements that could be supported by a directive on term insurance. Each of these agreements should be arranged, typically through a lawyer: a cross-option agreement is an agreement reached by all shareholders. It is set up to ensure that the sale of the share runs smoothly.
Each shareholder makes a policy either on himself, where the money goes to the remaining shareholders, or on the other where the money goes back to himself. HMRC Capital Taxes (formerly Capital Taxes Office) agrees that a double (or cross-option) agreement is not a binding sales contract and does not affect the relief of commercial property (Practice Statement SP12/80). . . .