The Need For Buy & Sell Agreements:
If you and your partner own the business and he/she dies without a buy/sell agreement or, worse yet, without money to fund the agreement, you just inherited a new partner – the deceased’s spouse. Your retirement plans, or plans to sell or expand, could be shattered.
Planning For Contingencies:
If your agreement states you must buy the shares from the deceased’s estate, and his/her estate must sell the shares to you on a predetermined formula, then you have the potential of owing the company – but where do you raise the money?
The solution – you own an insurance policy on your business partner’s life, and he/she owns one on your life. Now you have the money to fund the buy/sell agreement. You are a lot better off to have money to purchase the shares, than you are to have the obligation to buy the shares as per an agreement – with no money to do it.
We will work with your other professional advisors in the formulation of a shareholder protection plan tailored to meet your needs. We encourage you to seek professional advice on both your legal and accounting questions.