As a family business begins to plan for its longevity, a buyers - sellers agreement can play a very critical role. These agreements provide a thorough description of how ownership will transfer at the time of the death or incapacity of the business’s owner. While buy-sell agreements provide a deal about how the heirs of a deceased or disabled owner will receive assets from a company, clients often wonder whether they need a buy-sell agreement. The answer this question is that these agreements are suggested for any small or mid-sized company that has more than one owner. Also, in situations where a company has more than one shareholder, buyers - sellers agreements are recommended. To determine the value of a buy-sell agreement, it is often a wise idea to retain the assistance of a skilled probate attorney.
Particular Types of Businesses That Need a Buyer - Seller Agreement
While generally, buyers - sellers agreements are recommended for many different types of business groups, there are some specific kinds of companies that should choose to use a buyers - sellers agreement. These particular groups include the following:
- Business Owners Who Want to Fix a Fair Price in the Worth of a Company. Buyers - sellers agreements allow business owners to determine the fair price of a company and eliminate potential disputes. This element can advantageous to both buyers and sellers of a business.
- Buyers Who Want to Select Their Own Partners. In some cases, if a buyers - sellers agreement does not apply to the sale of a business, partial ownership rights in the business can be transferred to third parties not chosen by the buyer of the business.
- Individuals Who Want to Limit the Rights of a Former Partner or Business Owner. A large number of buyer -sellers agreements state that a previous owner must sell back his stake to the company if the individual ever works for the enterprise again.
- People Who Would Like To Reduce the Amount Owed in Estate Tax. The method contained in a buyers - sellers agreement that is used to determine the value of a company has a substantial effect on estate tax valuation. The owner of a business might believe that the company is worth much less than the federal government does. If an individual has a valuation method provided in a buyers - sellers agreement, an individual can then use the method contained in that agreement as evidence of how a company should be valued.
In addition to these various categories, there are many other situations in which an individual might particularly benefit from a buyers - sellers agreement.
Obtain the Assistance of a Skilled Colorado Estate Planning Attorney
Buyer -seller agreements are an important part of many business transactions in Colorado involving corporations, limited liability companies, and partnerships. At Whitcomb, Selinsky, & McAuliffe, PC, our legal counsel views buyers - sellers agreements as a critical part of the lives of individuals who wish to transition into retirement. Fortunately, our legal counsel has the significant experience helping individuals who need buy-sell agreements written. Do not hesitate to contact our skilled lawyers.
Contact our practice online or call us at (866) 476-4558.