What Is A Buy-Sell Agreement?

It’s a legal document, to provide for the smooth succession of your business upon the occurrence of a specified event. The agreement spells out the terms under which a designated party will buy your interest in the business if you die, retire or become disabled.

The intent is to help ensure that the business continues and, most of all, that your beneficiaries receive the fair market price, in full, for your interest in the business.

How it Works

A market is created for the business when a partner or owner dies, becomes disabled or leaves the business. This agreement establishes a predetermined business price and a buyer for the business interest.

Benefits of a Buy-Sell Agreement:

To the Surviving Shareholders
->	Avoids interference by the deceased's heirs
->	Ensures that the deceased's shares will be sold to the right people
->	Provides tax free cash
->	Avoids need to borrow funds
->	Avoids need to drain earnings and working capital
->	Ensures uninterrupted operation
To the Deceased's Estate
->	Ensures a buyer for the shares at a pre-arranged value
->	Provides prompt payment
->	Gives the heirs an income producing asset
->	Avoids loss through forced liquidation of assets in order to raise the needed capital

Please contact Peter McNally, Certified Financial Planner at McNally Financial and Insurance Group for more information on Buy-Sell Agreements.