The most important agreement for multi-owner businesses is the Buy Sell Agreement. It is an aspect of a succession plan, and it covers the all-important dimensions of a partner division for various reasons.
It is essential for business owners to sit down as early as possible and draft a buy sell agreement to assure for an orderly transition and to protect their most valuable asset.
Successful businesses often take years or decades to build and their owners devote substantial resources to that process; they also have a significant amount of their wealth tied up in the business.
Time has a way of changing our circumstances, perspectives, motivation and ideas about business direction and exit or succession. The time when owners are most open to agreeing on how to handle some of the difficult questions that often arise, is at the start of the business, long before either owner decides to leave or sell.
What does a Buy Sell Agreement do and why is it so important?
Unplanned business separations are a frequent cause of business failure, which impacts owner families for years.
A business is like a puzzle. The parts all fit together, and the co-owners often have different rolls and responsibilities.
One may be responsible for sales and the other for business operations.
The business that the owners create has value, not just as an asset, but as a way to support the families of the owners.
We help business owners create a buy sell plan that protects each of them and that also protects each of their families.
Some Questions You Should Be Asking:
- Do I have a current Buy Sell Agreement?
- If my partner dies, will I be ok with the spouse becoming my new partner?
- If I die will my family be taken care of?
- What will happen if I or my co-owners want to leave the business? Will the business be OK? Will the owners? Will I be OK?
- Do I have a way to exit if I need one?
- Do I and my co-owners have a mechanism to settle disagreements without going to court?