What are these agreements? These are absolutely crucial both to start ups and to existing businesses where there is more than one owner involved. This document outlines the relationship between the owners, assigns roles and responsibilities, shows the ownership percentage of the business and outlines what happens when the owners need to part ways.
There are many reasons why owners may need to leave the business. Some are voluntary (sale of ownership ). Others are not voluntary: death, disability, personal bankruptcy, divorce, forced termination of owner’s employment by the company and irreconcilable differences between the owners.
A proper buy/sell agreement addresses all of these issues. Furthermore, a good buy / sell agreement should be updated every couple of years, to reflect he changes in the business, the valuations and the relationship between the owners. While it may cost you several thousands of dollars to create this agreement, it may save you tens of thousands in legal fees later.
Disclaimer: This article only offers general information. Each situation is unique. It is always helpful to talk to a specialized attorney, to figure out your various options and ramifications of actions. As every case has subtle differences, please do not use this article for legal advice. Only a signed engagement letter will create an attorney-client relationship. ATTORNEY ADVERTISING.