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Shareholder agreements and Buy-Sell Funding

Posted by on in Partnership problems

Buy/sell agreements provide for the transfer of the ownership of the business in different circumstances ­ death, disability, retirement or disagreement. At death or disability, for example, the remaining owners may not want to be in business with the deceased owner's heirs or the non-active disabled owner. As well, the heirs or disabled owner may prefer to receive the value of the deceased owner's share of the business in cash. If an owner retires, an agreement paves the way for business as usual. If owners have a falling out, a buy/sell agreement will enable the business to continue or be "wound up" in an orderly fashion. 

 

A buy/sell agreement should deal with:

  • Who will buy the shares;
  • What the terms of the sale will be;
  • When the sale will take place;
  • Where the money to buy the shares will come from; and,
  • How much the purchase price of the shares will be.

 

 

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  • Smithd67
    Smithd67 says #
    Only wanna tell that this is very useful , Thanks for taking your time to write this. fdedabefdefkdgba

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