A business law firm can help you hack buy/ sell agreements
Business law firm in Boise and Nampa ID recommends creating buy/ sell agreements when you are in partnerships to protect your business. The value that you and your business partners have worked so hard to create will be protected by a carefully thought-out Buy/Sell agreement and a personalized Life Insurance plan.
Your company may become chaotic if a partner suffers an untimely sickness or passes away. Not only will you have to deal with a sudden loss of income and experience, but you’ll also have to consider how to make up for that partner’s or their family’s ownership stake in the company. When a loved one passes away, you may find yourself in the unpleasant situation of having to negotiate with upset family members who are now co-owners but lack the necessary knowledge and experience to keep the company operating. A protracted sickness can be challenging.
Naturally, you’d want to help a sick spouse, but how long can your company continue to make enough money to support them financially when they’re not working to generate sales? Simply put, a buy/sell agreement is a formal, written agreement between you and your business partners that spells out what would happen in the event that one of the owners leaves the company, whether due to illness, disability, death, or just because they’ve had enough. The agreement outlines the precise conditions under which a partner’s share will be purchased, the agreed-upon value methodology, and the buy-out procedure in order to safeguard the interests of all owners.
Buy/sell agreement types
1. Stock-redemption agreement
Shares-redemption agreements are legal contracts whereby the business commits to buy the stock of key employees who have passed away. These agreements are made between all of the key employees and the business itself. Key employees frequently consent to sell their shares to the company for a cash value.
2. Cross-purchase agreement
Key employees have the option to purchase the ownership stake of a key employee who has passed away or become incapacitated under a cross-purchase arrangement. Each key employee obtains insurance for every other important employee. Cross-purchase agreements are frequently utilized in smaller businesses with fewer critical personnel to cover.
Work with the best business law firm in Boise and Nampa ID
Protecting your business using buy/sell agreements can help avoid confrontations in the unforeseen future. Work with the best business law firm in Boise and Nampa ID to handle it correctly. Jacobson & Jacobson Law Firm, since 1982, is committed to serving the Boise and Nampa, Idaho areas for your top Criminal Defense, Personal Injury, Business Law, Estate Planning, Family Law, Immigration Law, and Litigation needs. Contact us today to get started.