Buy and Sell Agreement
What is a Buy and Sell Agreement?
A buy and sell agreement, also known as a buyout agreement, is a legally binding agreement between co-owners of a business that governs the situation if a co-owner dies or is otherwise forced to leave the business, or chooses to leave the business.
When do I need this?
When a co-owner in a business dies the remaining owners could face potential problems:
- The executor of the estate of the deceased owner might interfere in a business about which he/she knows nothing;
- He/she might want to sell the owner’s interest to the highest bidder, opening up the business to unknown external investors; and
- The existing owners may not have the funding to repurchase the deceased owner’s interest at that stage.
Do I need a legal expert to assist?
With Buy and Sell Agreements there are various legal and financial implications that must be considered. Ensuring that the intention of the Parties is correctly reflected in the Buy and Sell Agreement is crucial. Having one of our recommended contract and commercial transaction specialists have a look at the agreement will ensure that contract aligns with the intention of the Parties.