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 ?
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.
Because they can become obsolete soon after the buy-sell agreement is signed.
If you do not already have a buy-sell agreement in place for your franchlse, you may expose your family to financial hardship or a difficult negotiation with co-owners, key employees and key vendors.
Whether purchasing a key person policy, COLI, or an insured buy-sell agreement, or all of the above, companies like New York Life Insurance and Allstate offer trained personnel and resources statewide in Alaska to assist in business planning.
The buy-sell agreement dispels fears that the business would end upon the death of one of the owners.
A buy-sell agreement may distinguish between retirement and "withdrawal" or "departure," perhaps based on age.
Johnson Security's other attorney, notes that a buy-sell agreement should have some provision for an accurate valuation of the business interest that will be bought or sold.
Parrish: Many times, life insurance funding a buy-sell agreement is not actually owned by the business.
Suppose, for instance, that you and your co-owners run an incorporated business and upon the death of any co-owner, your buy-sell agreement requires the corporation to purchase the stock from the estate of the deceased shareholder.
The buy-sell agreement is a legal document that spells out how ownership will change hands in case of an owner's death, disability or retirement.
Failure to Enter into Buy-Sell Agreement with a Divorce Provision
This tragedy could easily have been avoided with a properly drafted and funded buy-sell agreement, a binding contract between business partners that controls the ownership of the company, protects each owner from partnering with those they did not choose and provides a source of income for a partner or a partner's family following retirement or death by assuring a guaranteed buyer and bound seller upon specified events.