Why Use A Buy-Sell Agreement?
A Buy-Sell Agreement, sometimes also called a shareholder’s agreement is a legally binding agreement among the shareholders (of a corporation) or interest holders (with a limited liability company) or partners (with a general partnership). The Buy-Sell Agreement places certain restrictions on the transfer of stock, membership interests, or partnership interests and may also require certain actions to be taken on defined triggering events like the death or retirement of a shareholder or partner. Although most frequently used by s-corporation shareholders, a Buy-Sell Agreement is also well suited to fit the needs of sole-proprietors, partnerships, and single-member limited liability companies. A Buy-Sell Agreement is a critical tool in stabilizing the value of a closely held business and for transferring it under specified circumstances to the desired parties. The nature of a closely held business (a business in which the majority shareholders (and their families) receive most of their i
