Death, disability, and retirement can become triggers for the transfer of your business interest. Those are good reasons to prepare now by creating a buy-sell agreement. Unsworth LaPlante, PLLC in Vermont offers Business Planning as part of our professional services.
Buy-sell agreements are contracts governing future sale or purchase of a business interest. Business continuation agreements and buy-out agreements are other names for this type of contract.
Such an agreement can enable tax advantages and control in terms of your family business. It can establish a structured and efficient way for the business itself to proceed in difficult situations. Peace of mind is part of the benefits as well. Then you know your heirs will be protected and the business will keep providing for them.
Questions to Ponder
You might be wondering how your business will be impacted by the death of a co-owner. Will you be able to buy out your partner’s portion? Will the business continue? What about being in business with survivors? What is the true value of the business?
Appropriate funding of the transaction is another consideration.
A disadvantage to consider carefully has to do with limiting your own opportunities, as typically a buy-sell agreement precludes sale to outside parties.