Buy-Sell Agreements, also known as “Shareholder Control Agreements” or “Member Control Agreements” in the LLC context, are binding contracts of closely held companies designed to facilitate the continued operations of a business.
On a basic level, the Buy-Sell provides guidance as to how an owner can leave the business, whether that is through an offer to purchase by a third party, or for other reasons, such as death, disability and divorce. A Buy-Sell will set forth the owners’ agreement as to what types of events will trigger options of either the company or the remaining owners to buy a departing owner’s shares, how and when that purchase can take place and the value of the shares.
Owners of closely held businesses should carefully consider these matters when planning for the future in order to protect their stake in a business and the stability of the business itself. A well-drafted Buy-Sell unified with a comprehensive personal estate plan offers the best protection available for the owner of a closely held business and for ensuring the continuation of a successful business.
For information or assistance, contact Foley & Mansfield business attorney Allison Brandenburg – firstname.lastname@example.org.