Why is a Machinery and Equipment Appraisal Required for a Buy Sell Agreement?
What is a Buy Sell Agreement? A buy sell agreement is the equivalent of a personal will but for a business. It will define triggering events that will allow or require partners to buy out one another. Some of the common triggering events include death, incapacitation, retirement, succession, or a partner’s desire to leave the company. The agreement will usually define who can buy out the partner and at what cost. In addition, it may define the methods used for valuing the company at the time of execution. The goal of the buy sell agreement is to document the intentions of the shareholders prior to the situations occurring so that the parties are fairly compensated. Buy sell agreements can be funded through insurance policies or other mechanisms to help assure that adequate funds are available to complete a transaction when a triggering event occurs. It is recommended that a buy sell agreement is constructed by an attorney with experience in creating such documents due to its importance
