Buy sell

What is a Buy-Sell Agreement?

A buy-sell agreement is a legally binding contract which protects the welfare of the company’s owners and permits the business to continue in the event of the death, disability, or retirement of a business owner. A buy-sell agreement, commonly referred to as buy-sell arrangement, is drafted by an attorney and can be implemented with all forms of companies including, partnerships, limited liability companies, and corporations. A buy-sell plan can be thought of as a written agreement to help a business navigate a successful business transition.

Buy-Sell Agreement Advantages

1.	Provides a smooth transition and continuity of management and ownership to the remaining business owners.
2.	Creates an instant market for a business interest that may not otherwise be saleable.
3.	Establishes a fair market valuation for federal estate tax purposes that is binding on the IRS.
4.	Spells put the terms of payment and is easily funded with life insurance and disability insurance, if desirable.
5.	Provides the liquidity to the retiring owner or to his estate in the event of death.
6.	Peace of mind and security for the business, the business owner’s and their families.

Buy-sell agreement is a legal contract drawn by the lawyer that indicates in detail of the parties to the agreement, an evaluation method of the business and method of payment for the following occurrences:
1. Death.
2. Disability.
3. Disillusionment.
4. Transfer of business interest at retirement.

Buy-sell agreements are used in any types of business including a sole proprietor or partnership. Since these types of business must legally close their doors when the owner or partner dies. The use of buy-sell agreements allow the business to continue while the new owner completes the transfer of ownership without going into debts.