No matter whether your business has been around for a few years or a few decades, being prepared for this phase can be critical.
Ultimately realizing the full value of the business requires a plan. Part of that plan may involve the establishment of a buy-sell agreement. A buy-sell agreement is a legally binding agreement that requires one party to sell and another party to buy a particular ownership interest in a business in the event of the death, disability or retirement of a partner or stockholder or upon certain other triggering events as specified in the contract. These agreements may be used by any type of business entity – sole-proprietor, corporation, partnership, limited liability company (LLC), etc.
Businesses can transition expectedly or unexpectedly. That’s why it’s important to plot a course toward protecting your business and minimizing the impact a change in ownership could have on those who depend on the business most.
Proper planning requires a comprehensive analysis, which would include addressing a number of concerns.
1 The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. We are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.