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Crafting and structuring a buy-sell agreement

On Behalf of | May 26, 2020 | Business Law

Think of it as “a business continuity tool.”

So says a company valuation expert underscoring the merits of a timely and well executed buy-sell agreement.

We express a similar thought at Tarantino Law Firm regarding that often essential contract for small companies, partnerships and other business entities. We stress on the website of our established New York commercial legal offices that a soundly crafted buy-sell agreement can be critical for “securing a business’s future.”

Proof is in the reality that often results absent such a contract. The troublesome relatives of a retired or deceased partner might suddenly demand a material say in company affairs. Creditors might unexpectedly have a seat at board meetings. Any number of scenarios might unfold from unforeseen events that undermine an optimal transfer of ownership.

Buy-sell agreements – executed early and well before ambiguity and conflict might feature at a critical company juncture – are legal instruments intended to provide for agreed transitions that promote rather than disrupt business operations.

Given that, notes the above-cited analyst, it is surprising how rare it is for commercial principals to be proactive regarding the negotiation and execution of this important agreement. Reportedly, about 75% of business owners lack succession plans at all for their companies.

A proven business law legal team can be a valuable ally for individuals seeking to create stability and certainty for their enterprises in the future. As we note on our website, securing that key aim can often be promoted through “incorporating a buy-sell agreement into a business succession plan.


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