Protection for business owners by pre-determining what will happen to a partners shares should they die or leave the business for any other reason.
What is a Buy / Sell Agreement?
Sometimes known as a Buyout Agreement, Business Will or Business Prenup, the Buy / Sell Agreement is a legally binding document that lays out how a partners share of the business will be allocated should they no longer be part of the company.
The buy / sell agreement creates a succession plan for the business by determining what will happen to the departing partners share of the business and how to determine the value of that share of the business. Life Insurance policies can be taken out on each of the partners so that should one partner die funds are available for the remaining partner(s) to buy out that portion of the company based on the terms of the agreement.