buy-sell agreement


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buy-sell agreement

n. a contract among the owners of a business which provides terms for their purchase of a withdrawing partner's or stockholder's interest in the enterprise.

References in periodicals archive ?
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.
Why insuring principal employees and owners may keep your business operating
But a formula approach is unlikely to enable the buy-sell agreement to both facilitate estate planning and provide liquidity at a fair market value during the owners' lifetimes.
Back to the future: Create a viable buy-sell agreement now
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.
How to prepare your business for succession: here's five steps to passing on your business
Parrish: Agreeing on the value of the business is one thing, but reflecting it in the actual buy-sell agreement adds a layer of complexity.
Talking buy-sell reviews: two industry experts discuss various approaches to exit planning, business valuation and buy-sell agreements
Another potential issue with respect to insurance-funded buy-sell agreements arises from the requirement that, in order to satisfy the notice and consent requirements, the employee must be notified in writing of the maximum face amount for which the employee could be insured at the time the EOLI policy was issued.
Employer-owned life insurance after the Pension Protection Act of 2006
But, if the buy-sell agreement had been set up so that the surviving owners personally purchased the stock from the deceased shareholder's estate (rather then using the corporation to buy the stock), the survivors would get a "step up" in tax basis in the purchased stock.
Creating a business succession plan
To work as intended, buy-sell agreements must specify the value of the company's stock and a way to pay for the shares.
Family matters: two-thirds of family-owned businesses don't make it to the second generation. Don't let yours be one of them
A properly drafted buy-sell agreement will have the flexibility of being either a cross purchase or a redemption agreement at the discretion of the company and the partners after considering the circumstances surrounding the triggering event.
Preventative medicine: how a buy-sell agreement can relieve future headaches
Similar buy-sell agreements may be entered into by members in LLCs engaged in other types of businesses, to provide a market for a deceased member's interest or ensure the remaining members can purchase a deceased member's interest for a price agreed on by the members at some earlier point.
Income taxation of LLC income in year of death
4) The franchisee submits the buy-sell agreement and other required information about the buyer to the franchisor.
Improving your franchise network through proactive transfer: key steps to ensuring a smooth and meaningful transfer of an existing franchise
Just as with other closely held businesses, buy-sell agreements are a good idea in a family owned business, says Waterman.
Exit strategies: seven in 10 closely held businesses survive succession
Life insurance can provide money to pay off estate taxes, fund buy-sell agreements or buy out a family member not participating in the business.
9 succession planning tips for accountants to give themselves: the October issue focused on succession planning, primarily from the viewpoint of how accountants can help prepare their clients. Phyllis Bernstein follows up this month by speaking to you--accountants who own your own firms!
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