A buy-sell agreement is an arrangement for the orderly transfer of a business interest.  At its core, a business succession plan identifies contingent issues affecting anyone that has an ownership interest that need to be addressed when designing a valid buy-sell agreement.  While we can help with the funding of a properly executed buy-sell agreement, you should also get your team involved in the actual wording and execution of your buy-sell.  This team should be constructed with a trusted Estate Attorney, Accountant or CPA, Financial Planner and the like.  There are 5 generally accepted methods of a properly constructed buy-sell agreement including personal funds, sinking funds, borrowed funds, installment payment plans, and life and disability insurance.  Only the latter proves the immediate funds necessary to fund the transfer of ownership. 

A properly constructed and funded buy-sell agreement can protect the interests of the business owners helping them assure the continuation of the business, protect its creditors and assure its customer base that the business will in fact survive the loss of an owner.  Other benefits include and are not limited to:

• Guarantee a buyer - the selling owner knows there is a purchasing business owner well in advance.
• Selling price is pre-determined - the buy-sell stipulates exactly what the purchasing price will be when the time comes.
• Liquidity - all owners involved can rest assured that the funds will be readily available to execute the agreement so everyone maintains their standard of living.
• Peace of Mind - surviving business owners will not be forced to deal with difficult negotiations with family members or business partners as the succession plan has already been put in place.