Have you taken the steps to ensure that your business will continue to run smoothly if you were to lose a business partner? Have you considered what will happen in the event of divorce, disability or even worse, death?
A buy-sell agreement can establish the value of the business, assure that there is a buyer for the business and improve creditworthiness of the business. Think of a buy-sell agreement as a formal exit strategy that ensures everyone is treated fairly, the business is in a position to continue and the family is well cared for.
With a buy sell agreement, the business owners enter into the agreement today that sets out the terms and conditions of the sale of their business interest at some point in the future.
These terms and conditions may include (but are not limited to) who will purchase the interest, what triggers the buyout, when the sale will take place, the value of the interest, how the purchase price will be paid and more.
What is Your Business Worth?
If someone walked into your office today and wanted to buy your business, how much would you ask for? If one of your co-owners wanted to leave the business, how much would you pay for their interest in the business? These questions are just the beginning of the exploration into the valuation of your business. Business valuation is sometimes part art and sometimes part science. The science may involve valuation methods that range from simple to fairly complex formulas.
Types of Buy-Sell Agreements
Your business structure, who owns the business, your family situation, will influence the choice of which arrangement is best for you. Learn more
Funding a Buy-Sell Agreement
Having a formal buy-sell is important, but just as important is making sure the money is there to complete the buy-sell. Learn more