Buy-Sell Agreements

Buy-Sell agreements are legally binding contracts that stipulate how a partner’s share of a business can be reassigned if that partner:

  • gets a divorce

  • becomes disabled

  • departs the company

  • dies

  • otherwise leaves the company.

Often, the buy-sell agreement will stipulate that the available share(s) be sold to the remaining partners.

Sometimes a buy-sell agreement has also been known as a buyout agreement, a business prenup, or business will.

A buy-sell agreement must be funded and be evaluated every few years to ensure proper funding is in place.

Buy-sell agreements are commonly used by sole proprietorships, partnerships, and closed corporations.

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