The Importance of a Buy-Sell Agreement

Starting a new business venture is exhilarating and not for the faint of heart. There is the dream of untold riches, financial freedom and the idea of being your own boss. Enter reality: half of these new ventures will cease to exist within five years. The reasons for the poor success rate vary and for closely held corporations the issue can be compounded by the unexpected exit of a partner. Sure many partners have an expectation; some will have openly discussed the issues and come to a “handshake” agreement. The unexpected departure of a partner leads to an interesting phenomenon: a sharp increase in the number of amnesia cases. Perhaps Mike Tyson was right: “Everybody has a plan until they get punched in the mouth.”

Purpose

A buy-sell agreement focuses on various events which can lead to the departure of an owner, including a desire to sell shares, divorce, retirement, bankruptcy, disability, or death.

Who’s this for?

  • Business Owners
  • Small Business Owners
  • Succession Planning
  • Family Business