Thinking about launching that business with a partner? Or is there already an existing business that you have been offered ownership in? Either way, one of the most important documents you will need is a Buy-Sell Agreement.
Affectionately termed a Business Will or Business Prenup, this document (or sometimes a section within a larger legal document) includes provisions for death, disability, retirement, divorce, and voluntary and involuntary transfers (including sales and bankruptcy) of a company. The agreement determines how the owners of a business can sell their interests, who they can sell them to, when they can sell them, and how much they can sell them for.
Let’s be honest, in a perfect world, you go into business with someone and no one ever goes their separate ways. However, the world is NOT perfect. There can be a myriad of reasons why ownership in a business must change. Since this is a glaring possibility for any paired business owners, the Business Will is a MUST. This is necessary no matter who you are in business with- a best friend, family member, or the smartest guy from your church or graduate school class! Without provisions that address these kinds of issues, owners are faced with increased financial risk.
Whether you’re writing your business plan or you are further ahead and have already started providing services or products with a partner or two, please take a moment to have a well-written Business Will drafted. Proactive is the name of the game. Handling this on the front end will save you a lot time, money and resources on the back end, should circumstances unexpectedly change. Protect your interests! Contact C&G to assist you today!
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