Business Litigation Lawyer
When you begin a business, excitement fills the air as all the pieces of the puzzle fall in place. From finding the right funding to locating the perfect storefront, your hard work makes it all worthwhile when you are only weeks away from opening your doors. However, if you are like most people, you may have forgotten a crucial step in your business planning phase – the buy-sell agreement.
What Is It?
The buy-sell agreement is commonly found in partnerships, sole proprietorships, and sometimes closed corporations. It is a legal document that establishes the transitional steps of business ownership when a partner decides to sell their portion of the business, or when a partner passes away and leaves everything to their family in a will. The agreement is binding to the business associates and sets the company ownership rights outside the boundaries of the will or personal choice, thus allowing determination of the disposition of the business shares to be legally determined when first setting up the enterprise.
Why Have It?
This company protection will make sure you have a plan if you die, are incapacitated, or move on from the business. The buy-sell agreement can also help with legal difficulties related to running the company after a partner’s death or prevent tax issues from closing business doors. As a business litigation lawyer from Eric Siegel Law explains, other benefits include:
- Surviving owners can prevent the risk of unknown partners buying shares.
- Next of kin with no business knowledge cannot inherit parts of the company.
- The agreement establishes fair value for business shares.
- Partners can determine a continuity business plan while on the same page.
The agreement safeguards the business during all the chaos that occurs when partnerships become broken. It lets everyone know how the business will continue and who is responsible for what comes next.
Who Makes It?
Contacting a business lawyer is the best way to ensure your buy-sell agreement completely protects your company. You will want to include a valuation clause, estate tax formula, business life insurance policy beneficiary agreements, and company ground rules. Since it will be a legally binding document, signed by each partner, make sure everyone has a voice in the agreement to prevent legal disagreements in the future.
New business owners are often stressed and filled with exhilaration during the weeks before the company opens. As you prepare your business plan, make sure you remember to contact a business lawyer to draft a buy-sell agreement. It could make the difference between staying open or closing the doors if a partner decides to leave the business or passes away.