Through a Buy/Sell Agreement, closely held business entities with more than one business owner benefit greatly from plans that govern what happens if a co-owner perishes, leaves the business, or has a life-changing event that interferes with ownership obligations. Vlodaver Law Offices, LLC has helped businesses for years plan their successions early, making the buying and selling of shares easier after an owner’s departure later on. We look at the future transaction and create mechanisms to detect pricing and details that need to be drafted into a Buy/Sell Agreement such as restrictions to prevent transfer of ownership without shareholder approval. An experienced Buy/Sell Agreement attorney can help in the following instances:
- When a current owner receives an offer to sell their shares to a third party; in this case, the corporation has the right or option of first refusal to match the offer before the sale, which requires legal counsel.
- When a shareholder cross-purchases life insurance policies on the lives of other shareholders so that the money to fund the share purchases is there when one of them dies; legal counsel is required to draft the terms of this agreement.
- When a Buy/Sell Agreement does not already exist, legal counsel can draft terms for who can buy a departing partner’s shares, what events trigger a sale (such as impairment, resignation, termination, or death), and what price will be paid for shares and interests. The price is usually determined by a formula, which takes into consideration the type of business, industry, and goals of shareholders, and may be in the form of book value, agreed upon value, fair market value, or some other type of mechanism.
Contact a Minnesota Buy/Sell Agreements Attorney
While Buy/Sell Agreements and the process itself seems rather complicated, an attorney who has experience writing an agreement to cover every aspect of an acquisition and who knows the business well will be able to make the process easy for all involved. Contact us for a free consultation on your Buy/Sell Agreement situation.