Buy & Sell Agreement

If you or one of your business partners should pass away or become disabled, the buy and sell would provide for succession planning to protect the future of the business. By agreeing that the surviving partners or shareholders will buy the interest of the deceased or disabled partner, you can ensure continuity of the business. According to the agreement, each shareholder takes out a life policy on the other’s life, which funds the purchase of their interest when the time comes.

A buy-and-sell agreement is an agreement between the business partners, obligating themselves to sell on their death or disability their interest to the survivors and likewise obligating the survivors to purchase the deceased partner’s interest.

Buy and sell agreements incorrectly drafted, could cause mayhem. There are numerous risks with catastrophic consequences on the surviving partner/s and loved one’s to be considered when contemplating or implementing a buy and sell agreement. However a sound buy and sell agreement protects all parties on the fortuitous event of death or disability of a partner or shareholder.

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