Buy-Sell Agreement FAQ

When does a business need a buy-sell agreement?

Every co-owned business needs a buy-sell, or buyout agreement the moment the business is formed or as soon after that as possible. A buy-sell, or buyout agreement, protects business owners when a co-owner wants to leave the company (and protects the owner who's leaving). If a co-owner wants out of the business, wants to retire, wants to sell his shares to someone else, goes through a divorce, or passes away, a buyout agreement acts as a sort of "premarital agreement" to protect everyone's interests, setting the price and terms for a buyout. Every day that value is added to a business without a plan for future transition, it increases the owners' financial risk. Nolo's Business Buyout Agreements book can help you when you're ready to put a plan into place.

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