What Are Buy-Sell Agreements?

A Video FAQ with Mary E. Vandenack.

Buy-sell agreements are agreements between owners of a business governing the relationship. Typically, they will govern what happens when one of the business owners wants to leave. A buy-sell agreement will cover different types of situations as well. If the owners also work for the business, it will cover what happens when one of the owners decides to discontinue working for the business. Another issue that will be covered is what happens if one of the owners becomes disabled or if one dies while owning the business. An important aspect of the buy-sell agreement is determining the value—so how much is going to be paid out to a business owner that dies or becomes disabled. Another issue is the terms of a buy-out. Is it going to be an issue for the business to figure out how to fund a sudden payment to an owner of the business. Often strategies like life insurance or disability funding for a buy-out are used to assist with that.

© 2014 Parsonage Vandenack Williams LLC

For more information, Contact Us


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s