buy-sell agreement


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buy-sell agreement

An agreement among partners or shareholders describing the circumstances and terms of sale if one or more wish to exit the arrangement or wish to sell their shares to an outsider.

References in periodicals archive ?
Then in the event of your partner's death or disability, you would purchase your partner's portion of the business at a price determined by your buy-sell agreement. You would make this purchase with a lump-sum payment from one of your insurance policies.
A buy-sell agreement should include provisions voiding any attempted transfer of equity that would invalidate the S-corporation election.
In order to avoid internal conflict and a smooth transition in situations where one or all owners desire to leave the business, a good buy-sell agreement may have any of the following additional provisions:
In choosing your buy-sell agreement's initial language, consider the tax implications.
* The parties ensure that the buy-sell agreement includes language defining "critical illness" in the same way as the critical illness policies.
If a key employee from outside the family will likely take over, the business may consider funding the buyout plan with an endorsement split-dollar buy-sell agreement. (Source: Crump Life Insurance Services)
Betti offers the example of an insured buy-sell agreement. Consider a business with four owners and one dies.
At these meetings, you can update bylaws, cover buy-sell agreements, and generally take care of business.
4) Buy-Sell Agreement: If you own your business with others, you need a buy-sell agreement.
One of the advisers on the team, Andrew Karlen of the law firm Karlen & Stolzar in White Plains, New York, says that a family business with co-owners generally should have a buy-sell agreement in place.
Parrish: Businesses have a lot going on at any one time, and a buy-sell agreement has implications beyond just good governance.