Who Should Execute a Buy-Sell Agreement?
A common misconception amongst financial advisers and insurance agents is that any business owner, including a sole proprietor, can execute a buy-sell agreement. As the parties to a Buy-Sell Agreement include all the business owners, it would be impossible for a sole-proprietor to execute such an agreement. While sole-proprietors can also undertake business succession planning, the mechanisms for succession planning for sole proprietors relates to “key-man insurance” (See our article “Wealth Protection For Your Business – Key Man Insurance”). The types of business organizations that benefit most from the execution of a Buy-Sell Agreement are partnerships and corporations. When Should a Buy-Sell Agreement Be Executed? Procrastination is a vice most of people share; not least of all business owners who are running thriving and successful businesses and do not have the luxury of time nor the inclination to consider morbid matters of unexpected illness or death. Unfortunately, in the area
