Buy-sell agreement

Buy-sell agreement — the contract among business co-owners fixing what happens to a deceased (or departing) partner’s shares: mandatory purchase by the survivors or the company, at a pre-agreed valuation formula, customarily funded by life insurance each partner carries on the others — so death triggers a priced, funded, automatic exit instead of a negotiation with grieving strangers. Without one, your heirs become minority shareholders in a business run by your partner, and his heirs become your partners. Co-buying any 4.2 acquisition makes this document as mandatory as the SPA.

First used in: 4.6 · Structures & estate: keeping it