Buy-sell agreements go by many other names –stock (or share) repurchase agreementsm or redemption agreements, cross-purchase agreements, purchase and sale agreements, blind buy-sells, or shotgun agreements. When it comes right down to it, there are only two kinds of buy-sell agreements: the kind that is drawn up at the right time and the one that is drawn up too late. Most businesses begin drawing up a buy-sell agreement when it is too late.
When a buy-sell agreement is drawn when it is too late, some dramatic, emotional event has taken place: a deadlock between owners, death of an owner, exclusion of an owner from the business, or worse. All of these events result in great stress for the parties, and transactions are often motivated by threats of litigation. When litigation between owners erupts, more often than not, it is settled by a buy-sell agreement. The expense of litigation is almost always many multiples the cost of an agreement that is drawn up when the parties are amicable. So smart business owners skip the expense, anguish, and uncertainty and have a buy-sell agreement in place before it is needed.
What is the best buy-sell agreement to have? That’s an easy question to answer. There is no best form of agreement; there is only what’s best for you. And that requires a careful consideration of the circumstances of the business and the owners.
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The best buy-sell agreement for you is the one is built to match your circumstances and address your objectives. The lawyers at Shoffner & Associates welcome the opportunity to help you. Contact us to discuss your businesses’ goals.