Buy-Sell Agreements and Succession Planning
Purpose of Buy-Sell Agreements
To ensure that the surviving partners in a business and their families are financially secure in the event of death or disability.
Often agreements between shareholders or partners in a business don’t have plans that cover exiting the business or valuations. This could lead to disputes between shareholders, families and sometimes the only option is to wind up the business and start again.
Why is it so important?
If something happened to your business partner without an agreement in place:
– Would their family and estate agree with your valuation?
– Would their beneficiary of shares want to work in the business or need to sell as soon as possible?
– Would you need to borrow money or sell assets to fund the purchase of the shares?
These are just some of the questions to ask, unfortunately too many businesses don’t have a formal agreement in place between the business owners.
Structuring the agreement and funding is essential to ensure that the proceeds filter to the right beneficiary. Too often we see business succession plans set up incorrectly and this leads to disaster. At RiskProtect we manage the whole process for you, ensuring valuations are agreed upon, family members are kept informed and the legal agreement provides what you need when you need it.