A buy and sell agreement is a legally binding contract that stipulates how a partner’s share of a business may be reassigned if that partner dies or otherwise leaves the business. Most often, the buy and sell agreement stipulates that the available share be sold to the remaining partners or to the partnership. Many times clients’ biggest concerns involve one of the following:
- Making an agreement that will adequately provide the value of their share of the business to their family
- Establishing how the interest is purchased (typically through a life insurance product)
- Choosing the appropriate buyout triggers
One of the most important items to consider is the value of the business defined in the agreement. If the value, or the method for determining the value of the business, are not reviewed and updated regularly, the risk is high that an existing owner will not receive the appropriate purchase price for his or her interest. Moschetti Law Group can help you build a comprehensive strategy for ensuring an effective transfer of the business on your passing.
Amir is one of 3 partners in a thriving medical group. Everything was going perfect for 7 years until Amir had a heart attack. He recovered quickly, but it quickly put the spotlight on a major problem: what would happen to his interest in the medical group if he were to die?
We worked with Amir, and ultimately his two partners, to create a structure where the other two partners would buy the share of the other from the respective estate should one of them die prematurely.