Buy-Sell Agreements

[row] [span6] [label style=”inverse”]A buy-sell agreement is basically the will for your business.[/label] [/span6] [span6][label]The buy-sell agreement addresses questions such as:[/label] [/span6] [/row] [row] [span6] It specifies what will happen after certain “trigger” events. Those events can include an owner’s:
  • Death or disability
  • Departure from the business (firing for cause, quitting, or retiring)
  • Desire to sell his or her shares
[/caret_list] The parties can always agree to different terms later, but if they can’t, having your business lawyer create a buy-sell agreement now provides a fallback with agreed-upon outcomes when that trigger event happens.
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  • What happens to the owner’s stock when he or she leaves?
  • Should a person be able to benefit from the company’s success if he or she is no longer contributing to it?
  • When someone dies, do the remaining partners need to buy out that person’s spouse or does the spouse get a seat at the table?
[/caret_list] The situations are varied, and the answers will differ based on your perspective. That is why buy-sell agreements demand customization by an experienced business lawyer.
[/span6] [/row][spacer] [hr][spacer] [row] [span12] Every business with two or more members will someday face a trigger event. The best time to create a buy-sell agreement to address these issues is at the beginning of a business. It will serve as a framework as your business grows and adds more equity holders who may have different needs and perspectives.
A business lawyer cannot represent all parties in the creation of a buy-sell agreement. Steve Sneiderman’s role as company counsel is to educate the individuals on the issues parties usually confront, the strategies to resolve those issues, and the relative pros and cons of each. The individuals then should make informed decisions after consulting their own attorneys. If your buy-sell agreement is being drafted elsewhere, Steve can represent you personally, reviewing the documents to ensure that your best interests are being served.
Whether you’re involved in a new business or an existing one that needs a buy-sell agreement, the time to involve Steve is now. Contact him today.
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