What would happen to your business if one of the business owners were to become disabled or die?
Disability and death are not things we like to think about, but if one of the business owners were to die or could no longer work, would you and the other owners be able to afford to buy their business interest? Failing to plan for this unexpected event can destroy a business, leaving nothing for those who built it.
A simple solution to this problem is a properly structured Buy and Sell Arrangement (supported by a buy and sell agreement) that guarantees that on the disability or death of a business owner, the necessary funds will be available.
A buy and sell agreement will ensure a seamless transition of ownership and protect the financial future of the business, while the deceased’s family receives an agreed price for their business interest.
What is a buy and sell agreement?
It is a legal and binding agreement between business owners that allows for the purchase of the disabled or deceased owner’s share of the business through a life assurance contract that pays out a lump sum on disability or death.
Every business should have a plan to deal with the loss of any of its owners.
A Buy and Sell Arrangement will make it easier to sleep at night.
Until next time, take care.