A Brief Introduction to Buy-Sell Agreements

A buy-sell agreement is a legal contract restricting the right to dispose of a business interest to specified parties according to specified terms. Typically, this arrangement requires a sale of the business interest, at a formula-determined price, upon one or more of the following triggering events:

  • Death
  • Disability
  • Retirement
  • Withdrawal from the business at some earlier time
  • In some cases upon attachment of the owner’s property by creditors or in a divorce

These triggering events will vary depending on the needs, desires, and circumstances of the parties.

Reproduced with permission.  Copyright The National Underwriter Co. Division of ALM

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