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Free legal form · Buy Sell Agreement

Buy-Sell Agreement.

Buy-Sell Agreement defining what happens when a member dies, divorces, becomes disabled, or wants to exit.

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When to use

Right for these situations.

When to use
Multi-owner LLC or multi-shareholder corp

Want clear exit terms.

When to use
Want to prevent unwanted owners

Ex-spouses, creditors, estate beneficiaries.

When to use
Want valuation mechanism

For interests being transferred.

When to use
Preparing for an aging member

Or one with health issues.

Common mistakes

What to avoid.

Mistake
No buy-sell agreement

Exits become litigation.

Mistake
Underfunded

Surviving owners may not be able to pay.

Mistake
Outdated valuation

Fixed prices should be reset.

Mistake
Vague triggers

Define explicitly.

FAQ

Common questions.

Cross-purchase vs entity-purchase?
Cross: surviving owners. Entity: entity buys.
How is price determined?
Appraisal, formula, fixed price reset.
Life insurance funding?
Standard.
What about divorce?
Typically a Triggering Event.

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