WHAT ARE THE PARAMETERS OF A BUY-SELL AGREEMENT?
A buy-sell agreement is a legal binding contract, that dictates the terms of a future sale and transition of a business’s interest while safeguarding the stability of ownership and management. In general, a buy-sell agreement is triggered by specified identifiable circumstances. For example; triggered by a (divorce, illness, disability, retirement or death) of a business owner.
In general, a buy-sell agreement can be established by utilizing a life insurance policy. When a buy-sell agreement is funded with life insurance the owner of the policy can use the life insurance proceeds, to purchase the deceased business owner’s interest based on a prearranged life insurance amount.
WHY IS A BUY-SELL AGREEMENT ADVANTAGEOUS?
With a buy-sell agreement in place, you’re able to guarantee the stability of your business while in an orderly transition, lessens any differences regarding the value of the business and avoids the possibility of heirs wanting to run or sell the business after an owner’s death.
Contact Us: To learn more about the three basic types of a buy-sell agreement.