Let’s say that you and your partners have a thriving business, call it WidgetAmerica LLC. Each of you owns a nice piece of that profitable company, making a good income and reinvesting in the business so that things continue to go well for years to come in the wild world of Widgets. Then something happens, you retire, or something catastrophic happens—car accident, a coma, death, jail time—something that will take you away from the company for good and all; something that will force you (or your heirs) and your partners to make some hard decisions.
The Buy-Sell Premise
One way to make this time of doubt and trouble easier is to institute a Buy-Sell Agreement. Essentially, this agreement stipulates that the other partners or co-owners are required to purchase your stake in the company should a “trigger event” take place, such as death, disability, retirement or some other stated event. Given that you will be paid a fair price... [Read Full Article]