Buy-Sell Agreements

The Foundation of Business Continuation Planning

A buy-sell agreement can help business owners face the future with confidence, knowing that no matter what the future holds, their company can continue to operate, and loved ones can be taken care of.

How companies benefit from a buy-sell agreement:

  • Removes uncertainty and provides security.

  • Provides liquidity to a deceased owner’s family for estate purposes.

  • Helps to set the value of the business interest for tax purposes.

  • Provides reassurance to creditors, employees and clients that the business can continue to operate and thrive without a particular owner.

  • Protects the owners and their family members from a forced liquidation of the business.

How employees benefit from a buy-sell agreement:

  • Establish a ready market to purchase the business and identify the events what would trigger the agreement.

  • Establish a value for the purchase price of the business.

  • Create a legal obligation for the departing owner to sell his or her business interest, and a legal obligation for the buyer to purchase the interest.

  • Provide a source of funds necessary to make the arrangement effective.