Ensuring the longevity of your business is an integral part of your financial plan.
Although most business partners believe that they will stay together in the future, that is not always the case. Many situations that can affect the success of your business deserve your serious attention.
Your business may be disrupted if one of your partners dies or leaves due to a permanent disability, retirement, bankruptcy, divorce or an unresolved dispute between business owners and shareholders. If your business loses an owner, the remaining partners must decide how to proceed. You usually have four options to consider:
- Shut down the business;
- Continue business with a new partner;
- Sell your shares;
- Buy the deceased owner’s estate shares.
A buy/sell contract can protect your business from the potential harm of losing a partner. This type of agreement covers both the ownership conditions as well as the operation of your business, and should be a crucial part of your business plan.
To learn more about Buy/Sell Agreements, we invite you to reach out to us.