Buy-Sell Agreement

The Buy-Sell Agreement is an important part of business succession planning. The buy-sell agreement generally restricts the sale or transfers of ownership closely held companies, LLCs, or partnerships. Such restrictions protect owners from having to work in closely held companies with other shareholders, members or partners whose interests are not aligned. The buy-sell may also provide liquidity for the estate of a deceased owner or transfer control of voting shares to successor owners.

The Buy-sell Agreement may be entered into among all owners or a company or just particular owners who desire an exit strategy. The Buy-Sell Agreement typically allows an owner to transfer his or her interests to a revocable trust of which the owner is a beneficiary. The most advanced buy-sells include sophisticated retirement income provision and/or strategies to fund the buy-sell insurance with pre-tax dollars.