Buy-Sell Agreements

Buy-Sell Agreements

Buy-Sell Agreements are legally binding agreements between business owners that set forth the terms upon which one or more owners may buyout another owner’s equity interest upon that owner leaving the business, divorcing their spouse, passing away, or becoming incapacitated.  Alternatively, the company may be granted to right to redeem the shares, instead of the other owner’s purchasing the shares.  This is important where the owners want to be partners in business with each other, but with the other owner’s spouse, heirs, or some unknown third-party.  The buy-sell agreement may provide for maintaining life insurance to cover the cost of a buyout in the event of an owner’s death.