Building relationships & securing lives
Buy-Sell Agreement
What is it?
A Buy-Sell Agreement is a legally binding contract between business co-owners that defines the terms for reallocating a partner's ownership shares in the event of their death or departure from the business. This agreement helps prevent costly disputes over control, avoids potential conflicts with surviving family members or spouses, and eliminates the need for probate court proceedings, ensuring a smooth transition and stability for the business.
Types of Buy-Sell agreements
- Cross Purchase - The remaining partners will purchase the shares of the business
- Entity Purchase = The business purchases the departing partners shares of the business
Benefits
- Prevents shares of the business to be sold to an unsuitable third party
- Ensures that the existing partners can afford the buyout of the departed owners shares
- Prevents a break in management & voting control of the business
- Sheilds your business from squabbling relatives, business associates, and spouses