Buy Sell Agreements

Partners will retire, will want to sell their share, may pass away or become disabled.

Without a plan, disputes are inevitable.

Every business partnership, LLC & corporation needs a plan, developed in advance, including solutions for each triggering event that can lead to dispute.

A Buy-Sell Agreement will prepare your business for events that impact your interest in the business.

Business handshake

Benefits of a Buy-Sell Agreement

 

Prevent Partnership Disputes
Create a Market for your Share
Manage Dishonest Partners

Avoid Courts
Prepare for Partner’s Death

Fix Company Mismanagement
Prepare for Partner’s Disability
Prevent a Sale to Outsiders

Common Conflicts Between Partners

Potential Conflicts Between Partners

How Does a Buy-Sell Agreement Work?

A Buy-Sell Agreement, the contract between owners of a business, or among the owners, is designed to allow a purchase or sale of interests in the business at a price determined under the Agreement upon certain “Triggering Events”

Ensure a smooth transition to the next generation of your family. Preserve your family legacy in the business you created. Transfer ownership to family while maintaining control and decision-making power.

 

Events triggering the agreement:

  • Death of a Partner

  • Disability of a Partner

  • A Partner’s Divorce

  • Offer from Outsiders to Purchase an Owner’s Interest

  • Termination of Employment

photodune-7023279-shoot-goal-l

Avoid Unintended Consequences of Not Having a Plan

Liquidity for Estate Taxes

photodune-6436563-tax-m

Don’t Sell Assets to Pay Taxes

Without a Buy-Sell Agreement, you are most likely not financially liquid enough to pay estate taxes without having to sell assets.

A Buy-Sell Agreement creates a low-cost financing method of creating cash to pay estate taxes without having to sell your business interest or other assets to pay estate taxes.

Protect S-Corporation Status

photodune-6535032-risk-m

Unplanned Transfers Could Violate S-Corp Status

S-Corporations are highly valuable entities.  But to qualify for “S” status, many requirements must be met.

If during the life of your business you violate one of the requirements for “S” status, you will automatically lose your S-corporation, causing higher taxes and penalties.

An intelligently drafted Buy-Sell Agreement will prevent a termination of your S-Corporation status and will isolate the action of the offending partner so that the rest of the shareholders are not hurt by a termination.

 

Create Buy-Out Funds for Retirement Buy-Out

photodune-5042697-marketshare-s

Don’t Sell Assets to Buy Out a Partner

Many clients are worried that they cannot afford to buy the shares from the family of the departing partner.  Because the business usually represents the most valuable asset business owners have, they do not have liquid capital to fund the buy-out of a partner.

A Buy-Sell Agreement can be funded with life insurance, so that when a partner retires or dies, the cash value of the life insurance policy can pay for the buy-out of the departing partner.

An intelligently designed Buy-Sell Agreement anticipates the changes in business valuation over time and provides the right amount of funding when a buy-out of a partner is triggered.

Enhance your Company’s Credit

photodune-7649409-idea-money-m

Longevity Is Credibility

A Buy-Sell Agreement creates long-term continuity for your business.  Because you have a succession plan in place, lenders and others who rely on your company know that you have a game plan in place.

Business continuity is an important part of strengthening your company’s profile as a stable and reliable partner to do business with.

Your Buy-Sell Agreement gives you assurance that the next generation will either run the business like you want them to or give them a roadmap for how to get the most value for your share by selling it.

 

LET’S GET STARTED!

photodune-6534965-businessman-m

Business Essentials

Lid est laborum dolo rumes fugats untras. Etha rums ser quidem rerums facilis dolores nemis onis fugats vitaes nemo minima rerums unsers sadips amets. Ut enim ad minim veniam, quis nostrud Neque porro quisquam.Etha rums ser quidem rerum facilis dolores nemis onis fugats vitaes nemo minima rerums unsers sadips amets sit condim eser ntumsi nibh, uum a justo vitaes amet risus amets un. Posi sectetut amet.
Lid est laborum dolo rumes fugats untras. Etha rums ser quidem rerum facilis dolores nemis onis fugats vitaes nemo minima rerums unsers sadips amets. Ut enim ad minim veniam, quis nostrud Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci amets uns.  Etharums ser quidem rerum facilis dolores nemis omnis fugats vitaes nemo minima rerums unsers sadips ameet quasi architecto beatae vitae dicta sunt explicabo. amets dolores.
Lid est laborum dolo rumes fugats untras. Etha rums ser quidem rerum facilis dolores nemis onis fugats vitaes nemo minima rerums unsers sadips amets. Ut enim ad minim veniam, quis nostrud Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci amets uns.  Etharums ser quidem rerum facilis dolores nemis omnis fugats vitaes nemo minima rerums unsers sadips ameet quasi architecto beatae vitae dicta sunt explicabo. amets dolores.
This is the text for this tab.
This is the text for this tab.
This is the text for this tab.