This is most commonly done through what is called a "buy-sell agreement
." Your buy-sell agreement
will detail the circumstances under which one partner will buy out the other and at what price.
Ford Middle East has announced the successful completion of a buy-sell agreement
between its two Saudi distributors, Mohamed Yousuf Naghi Motors Co.
'Through this collaboration, home buyers can get loans from us from the early stages of a purchase - having just a buy-sell agreement
- at a 10 per cent annual interest rate."
A buy-sell agreement
(also known as a shareholder agreement) plays an important role in maintaining alignment between ownership and a business' objectives.
It is important for a business with multiple owners to have a buy-sell agreement
, but the time to create such an agreement is not during an ownership transition, but rather right at the outset, when all of the owners are involved and an orderly transition can be planned for.
The primary purpose of a buy-sell agreement
is to legally confer on owners of a business or the business itself the right or obligation to buy a departing owner's interest.
Advising two parties to a transaction (e.g., a buy-sell agreement
), helping parties resolve a dispute or participating in business deals with clients are problematic in some cases.
--Read Business Succession Planning and the Buy-Sell Agreement
They cover what a business divorce is, pre-suit considerations, effectuating a split, challenging a split, common claims, the nature of claims chart, issues in damages and valuation, statutory definitions of value, protective measures--a practical guide, voluntary corporate dissolution checklist, dispute resolution checklist, and buy-sell agreement
dispute avoidance checklist.
With their attorney's assistance, they enter into a typical buy-sell agreement
. Three years later:
If the owner decides to dispose of the business during his or her lifetime, the employee typically has the right of first refusal under a buy-sell agreement
's terms and conditions.