What does a buy-sell agreement do?
It’s a legal document that defines each partner’s rights and responsibilities in the business and lays out how to divide assets and liabilities in case the partnership dissolves. Q: Do you think it’s important for married business partners to have one? A: I’d go one step further, and advise them to sign a post-nuptial agreement that defines everybody’s rights and responsibilities if the marriage breaks down, and how to divide the business at the same time. It’s very similar to a buy-sell agreement, but it empowers a divorce court to deal with your assets, so the two issues are consolidated under one judge. That saves a lot of legal fees. Q: What’s the best way to set up a post-nup? A: Hire a corporate attorney to define the normal buy-sell terms of that agreement: What happens upon death, retirement, and if one party wants to sell their interest. It should include a right of first refusal. That means a partner who wants to divest can find a third-party buyer at fair-market value, but t
