Plan for Ownership Transitions Before They Happen
A buy-sell agreement is a legally binding contract that establishes what happens to a business owner’s interest when they leave the company—whether due to retirement, disability, death, or other triggering events. Often called a “business prenup,” this agreement protects both departing owners and those who remain.
Without a buy-sell agreement in place, ownership transitions can lead to disputes, business disruption, and even forced liquidation. A well-drafted agreement addresses:
• Who can buy a departing owner’s interest (remaining owners, the company, or outside parties)
• What events trigger a buyout (death, disability, retirement, divorce, bankruptcy)
• How the business will be valued when a triggering event occurs
• Payment terms and funding mechanisms (life insurance, installment payments, company reserves)
• Restrictions on transferring ownership to outsiders
• Procedures for resolving disputes about valuation or terms
Why Work With an Attorney?
Buy-sell agreements involve complex legal and financial considerations that require professional guidance:
• Select the right type of agreement for your business structure (cross-purchase, redemption, or hybrid)
• Establish fair and defensible valuation methods that hold up under scrutiny
• Coordinate with insurance professionals to properly fund the agreement
• Address tax implications for both the business and individual owners
• Ensure the agreement complies with your operating agreement and state law
• Build in flexibility for changing circumstances while maintaining enforceability
Don’t wait until a triggering event occurs to address ownership transitions. Let us help you create a buy-sell agreement that protects everyone’s interests and keeps your business running smoothly through any transition.