Buy-Sell / Business Continuation Plans Part 1 of 5
June 4, 2013 Leave a comment
The Basics of Buy-Sell / Business Continuation Planning
Part 1 of 5
A Buy-Sell / Business Continuation Sell agreement should be considered in every closely held business.
This agreement, or arrangement, defines the disposition of an owner’s interest in the business, yours or a partner’s, upon the specific triggering event such as a partner’s death, disability, retirement or other termination. This is especially important when the owners want the business to stay with the remaining owners or family members and want a way to protect the business.
A well documented, and properly funded, agreement can protect the interests of all the owners and help maintain continuity of the business after the triggering event.
The agreement can take different forms, including
(1) Entity purchase or stock redemption.
(2) Cross purchase
(3) Wait and see.
These three videos help introduce the importance of a Buy-Sell arrangement:
Disclaimer: I do not provide tax, legal or accounting advice. I recommend qualified attorneys, accounting and funding professionals to assist in the formation, valuation and funding of your buy-sell / business continuation arrangement.