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Corporations as Shareholders

Corporations as Shareholders

Jun 07, 2021

In the circumstance where a corporation (Corporation B in process below) is a shareholder of another corporation (Corporation A in process below), and Corporation A does not have an individual shareholder (non-corporate) with >20% ownership, the following steps should be taken to list Corporation B as a shareholder and screen the appropriate parties.

Step One
The name of Corporation B is entered as a Shareholder on Corporation A’s profile (instead of listing the name of an individual, Corporation A’s representative would type in the name of Corporation B). Corporation B should be flagged as a minor (so that Corporation A is able to successfully onboard and remain in good health).

Step Two
Corporation A (or the MGA above Corporation A in the chain) would contact Corporation B and request*:

  1. Articles of Corporation for Corporation B; and

  2. A list of Corporation B’s key officers/decision makers and their contact information

*Note: This request, and the provision of the resulting information, would happen outside of the APEXA system).

Step Three
The information from step two is provided to the Carrier, who will then determine who they would like to screen from the list provided and provide this information to Corporation A (or the MGA above corporation A). 

Step Four
Corporation A or the MGA would send an invitation to the individuals identified in Step 3 (Note: if Corporation A is a non-billable organization, they will have to request that the billable organization above them in the hierarchy sends out these invitations).

Step Five
Individuals invited in Step 4 would onboard as any other advisor (create a profile, answer the ASQ, etc.).

Step Six
Corporation A would then instruct onboarded individuals from step 5 to “request a contract” with the Carrier/MGA indicated in Step 3.

Step Seven
Carrier/MGA will send a shell contracting package (could be titled “Corporation Shareholder Screening” and contain solely a yes/no question) to establish a relationship between themselves and the individual they wish to screen.

Step Eight
Screening of the officer/decision maker would be available at this point.