Funding Buy-Sell Agreements

We find this is an area business owners often neglect simply because they haven 't thought through the issues.

Buy-Sell Agreements

A Buy-Sell agreement is a contract in which the owners of a business agree that if one of them dies, or leaves the business for any reason, the other(s) will purchase his or her interest in the business.  The parties to the contract may be partners, agreeing to purchase the interest of a partner who dies. alternatively, they may be a father and son, where the son (or daughter) is to purchase the father's (or mother 's) business on their death.

Buy/Sell Agreement should address:

 1. Who will buy the shares;
 2. What the terms of the sale will be;
 3. When the sale will take place;
 4. Where the money to buy the shares will come from; and
 5. How the shares are to be valued.

To ensure the agreement is viable, proper funding must be in place. Without proper funding, agreements can fall apart. The remaining owners benefit from a funded buy-sell agreement because the business is able to continue with no loss of control for the existing shareholders. The ownership transition is handled smoothly, quickly and effectively!

Let us show how we can put a Buy-Sell Agreement in place and how to fund the Buy-Sell Agreement through setting up an insurance protection programme.

If you have an existing agreement let us review this for you, its likely we will be able to save you money.

Please contact Alison Renfrew our business insurance specialist. 

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or phone 04 471 0662.