What happens if your business partner dies, or becomes permanently disabled. What if he or she wants to sell?
A buy-sell agreement will determine those answers * before you need them. The agreement can:
1) Clearly define triggering events.
One owner’s death, disability, divorce, or even a dispute that can’t be settled might trigger the buy-sell agreement.
2) It will establish control:
Without a buy sell agreement a business owner can pass ownership interest to anyone, from a spouse or child, to a creditor or even the competition!
3. The buy-sell agreement will identify and ensure funding sources.
That is the “how and when” to pay for the interest of the withdrawing partner. Options include buying life or disability insurance, determining whether the business has sufficient cash flow to pay out a lump sum at closing, establishing a line of credit. Or stretching payments out.
4) A buy sell agreement allows you to establish
A fair selling price for an owners interest before a trigger event.
And finally flexibility and privacy,
A well drafted buy sell agreement allows you to title your business interest in a trust, with the option of naming a beneficiary, which keeps it from the public eye of probate.
For help establishing a buy -sell agreement in florida, call paul burkhart or visit paulburkhart.net.