Does your business have a buy/sell agreement in place?
If something happens to your business partner what happens to their share of the business? Ironclad’s team has financial and legal expertise to help you review these documents with your partners and family.
Questions that we ask:
1 Have you reviewed your agreement(s) with your partners or estate?
2 Do you all agree on the value of the company(s), both with and without you?
3 Who will be in charge?
4 Is there a smooth plan for transition?
5 How will it be funded?
What Is a Buy and Sell Agreement?
A buy and sell agreement is a legally binding contract that stipulates how a partner’s share of a business may be reassigned if that partner dies or otherwise leaves the business. Most often, the buy and sell agreement stipulates that the available share be sold to the remaining partners or to the partnership. The buy and sell agreement is also known as a buy-sell agreement, a buyout agreement, a business will, or a business prenup.
How a Buy and Sell Agreement Works
Buy and sell agreements are commonly used by sole proprietorships, partnerships, and closed corporations as a way to smooth the transition in ownership when each partner dies, retires, or decides to exit the business.A buy and sell agreement provides the legal detail on how the business will be sold to the company or the remaining members of the business according to a predetermined formula.
Almost everything worthwhile carries with it some sort of risk, whether it’s starting a new business, whether it’s leaving home, whether it’s getting married, or whether it’s flying into space.