Planning for Business Partner's retirement, what happpens?

[axeman462]

My business partner is planning to retire this year. His license is up for renewal in August. He is thinking of just letting his license lapse.

All of his commissions are assigned to our agency. Are we right in thinking that his portion of the commissions will continue getting paid to the agency? Or will they stop when his license is revoked for lack of CE Credits?

 

[somarco]

If FL has an agency license should not be a problem.

Does he want to continue receiving commissions as a residual or is he completely walking away via a buyout?

He (or you) should ask the carriers how they would treat it. Much depends on the structure of the agency . . . LLC, partnership, etc. Every carrier could be different. Communicate in writing and get a written response.

 

[Newby]

My business partner is planning to retire this year. His license is up for renewal in August. He is thinking of just letting his license lapse.

All of his commissions are assigned to our agency. Are we right in thinking that his portion of the commissions will continue getting paid to the agency? Or will they stop when his license is revoked for lack of CE Credits?

Yes if he is a LOA (licensed only agent) his sales were never tied to him. They are tied to the agency. As long as the agency is licensed they will keep getting paid. He does not need to be licensed if he does not plan to make additional sales.

 

[axeman462]

If FL has an agency license should not be a problem.

Does he want to continue receiving commissions as a residual or is he completely walking away via a buyout?

He (or you) should ask the carriers how they would treat it. Much depends on the structure of the agency . . . LLC, partnership, etc. Every carrier could be different. Communicate in writing and get a written response.

We are currently exploring different options for his buyout. It may be a combination of both a lumpsum and a salary for a period of time.

The agency is structured as an LLC, come Monday I guess we will have to get some confirmations from our uplines and carriers.

Thank you for your advice

 

[Newby]

We are currently exploring different options for his buyout. It may be a combination of both a lumpsum and a salary for a period of time.

The agency is structured as an LLC, come Monday I guess we will have to get some confirmations from our uplines and carriers.

Thank you for your advice

If he’s not actively working in the business he shouldn’t be paid with a salary. He should receive ownership distributions.