Do I need a buy-sell agreement with my business partners?
Buy-sell agreements, also known as shareholder agreements, are common between business partners. Smart business owners will include a buy-sell when forming an LLC or corporation. The buy-sell will govern what will happen in the event of a dispute between owners, the death of a partner, the disability or retirement of a shareholder, or the desire of an owner to sell his interest to a third party. Without a buy-sell, your partners could sell part or all of their shares and when an unknown brother-in-law shows up for work and claims to be another officer, you could not complain. Without a buy-sell, there is no assurance that your family would continue to receive income from the business after your death, or even receive money for your interest in the business after your death or retirement. Mr. Cohen highly recommends using buy-sell agreements in almost all cases of multiple business owners both to protect the remaining owners, as well as the family of a deceased partner. Without a well-drafted shareholders agreement, the parties could easily wind up spending large sums of money fighting these issues in court.
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