For businesses with more than one owner, the importance of a buy-sell agreement cannot be overstated. Events such as the death, incapacity, retirement or even divorce of one of the owners (“Triggering Events”) can sink a business if the owners have not entered into a buy-sell agreement. Unfortunately, most small business owners do not have this vital agreement in place. Our business attorneys understand the importance of having agreements in place to help alleviate the concerns that come about due to a change in ownership. A well-drafted buy-sell agreement can put business owners and their families at ease knowing there is a plan in place.
Many concerns arise when there is an unforeseen change in ownership. For the remaining owners, the most common concerns are: 1) being forced to work with the departing owner’s successors, who may have potentially conflicting ideas; and 2) finding a source of capital to fund a significant buyout. And for the departing owner, the primary concerns are: 1) ensuring his or her family is compensated fairly for their share of the business; and 2) providing funding for the family to pay potential estate taxes. A properly drafted buy-sell agreement can address each of these concerns.
The attorneys at the Franchise & Business Law Group have worked with their business clients to create the right Buy-Sell Agreement that fits the specific needs of the owners.