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Clients First
It’s not just a motto;
it’s the guiding principle of our law practice.
Clients First
It’s not just a motto; it’s the guiding principle of our law practice.
Buy/Sell Agreement

A Buy/Sell agreement is important for business succession planning.  A Buy/Sell Agreement provides for the future transfer of your business interest to a co-owner, or for the purchase of a co-owner’s business interest by you, upon certain events occurring. Those events may include death, incapacity and retirement.

A Buy/Sell Agreement can ensure a seamless continuation of your business upon your death or that of your business partner, allowing the survivor to buy the deceased partner’s share using a valuation process and payment plan set forth in the agreement. If you or your business partner do not have a Buy/Sell Agreement in place, the deceased partner’s business interest will automatically pass to the deceased’s heirs — leading to potential disputes that can disrupt business.

 

FAQ

When does a business need a Buy/Sell Agreement?

Every business that is co-owned should have a Buy/Sell Agreement.  Without a Buy/Sell Agreement in place, the business owners live with unnecessary risk.

How is the business valued when being bought out by a co-owner?

The business can be valued by a professional appraiser or by using a valuation formula that includes reviewing financial statements from previous years.  It is recommended that the valuation method be addressed in the Buy/Sell Agreement so the co-owners agree upon the valuation approach in advance. This will help alleviate confusion and disputes when the buyout occurs.