Buy-Sell Agreements

A successful business venture requires many different levels of organization. In many cases, especially with very ambitious projects, other partners might be involved in order to help manage the workload a bit more effectively.

Regardless of how well you know your partner(s) or shareholders, drawing up a buy-sell agreement at the start of the endeavor is usually a good idea. It helps to reduce confusion and disagreement in the future, especially if things don’t go as well as you hope.

What is a Buy-Sell Agreement?

A buy-sell agreement is a contractual agreement between members of a business or organization, usually between either the business owners or the shareholders. It outlines the future of the company. Buy-sell agreements are usually put into place in order to make sure that every individual involved receives fair treatment.

A buy-sell agreement thus preserves the continuity of ownership and binds each individual in some way to the future of the business. These agreements typically address several issues:

• Who can buy a departing shareholder’s equity in the business and how this process might transpire
• What events might trigger a buyout of the business or a particular shareholder
• What price will be paid in the event of a buyout

Contact Skjold ▪ Barthel

If you are thinking about writing up a buy-sell agreement for your business, the assistance of a seasoned business attorney can be invaluable. If you would like to explore your business law options, contact the Minneapolis business attorneys of the Skjold ▪ Barthel law firm by calling 612.746.2560.