Buy-Sell Agreement and Funding

Is your business prepared for the sudden departure of one of its owners?

Buy/sell agreements provide for the transfer of the ownership of the business in different circumstances: death, disability, retirement or disagreement.

BUY-SELL AGREEMENT & FUNDING

Generally, the agreement covers:

Who will buy the shares,
What the terms of the sale will be,
When the sale will take place,
Where the money to buy the shares will come from,
And what the purchase price will be.

Funding the buy-sell agreement

Proper funding must be in place to ensure that money is available to buy the shares of a deceased or disabled owner, should the event occur.

Without funding, agreements can fall apart because the remaining owners, obligated under the terms of the agreement to purchase the departing owner’s shares, may not be in a financial position to do so.

There are a number of ways to fund a buy-sell agreement:

Life insurance can be the most cost-effective solution to fund a buy-sell agreement when an owner dies. It guarantees that money is available when needed. What you receive is peace of mind knowing things are taken care of.

We can structure an effective and efficient funding vehicle to complement your buy-sell agreement.

You can start saving today,
You can borrow the funds from a bank,
You can take the funds from current earnings,
You can sell assets,
You can purchase life insurance and disability insurance to provide the funds needed.