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What is a Buy-Sell Agreement?

July 28, 2020

1. Why Have These Types of Agreements?

An Ownership Agreement sets forth predetermined outcomes with regard to certain events. As an example, at a certain point in the company's existence the owners may determine that certain procedures are to be followed in the event another business offers to purchase the company's assets, or in some cases, some ownership interest in the company. These Agreements can dictate the timing of such an acquisition, and can repel certain advances while inviting others.

2. Is There a Way to Invest in my Company's Ownership Exit Strategy Now?

In many case, life insurance policies or disability policies can be purchased by individuals or the company in order to buy-out a disabled or deceased owner's interest in the company.

3. Can Buy-Sell Agreements Change?

Like anything else, companies can change rapidly. A company experiencing substantial change in its management or revenues should consider reviewing their Ownership Agreement as a business planning tool. You should contact a lawyer to review your agreements and suggest changes as your business changes or grows.