Buy-Sell Agreements

To keep your business strong, you must hope for the best, but always prepare for the worst-case scenario. One of the worst-case scenarios for a business is the death or incapacity of an owner, which can impact the continuation of your company. There are several options available to help your business withstand the loss of an owner, including having a buy-sell agreement in place. A buy-sell agreement utilizes life insurance as the funding mechanism that establishes a plan for fair transfer of ownership to the remaining owner(s), directs a clear path forward for the business, and assists remaining owners with funds for the purchase.

A PLAN FOR TRANSFER OF OWNERSHIP AND CONTINUITY OF BUSINESS

Transfer of Ownership Plan

A buy-sell life insurance agreement dictates terms for a transfer of ownership, including necessary circumstances, sale price, recipients, and payment details.

Directions for Transition

The upheaval a business experiences upon the death or incapacity of an owner is detrimental to financial and company stability. A buy-sell agreement instructs owners and employees in how to ensure a smooth transition for the business, employees, and customers.

Binding Rules for Transfer

Since a buy-sell agreement is a binding legal contract, all parties are assured terms will be met. Remaining owners know ownership rights will not transfer to an undesirable party.

Assistance with Funding

Coming up with cash to buy a departed owner’s rights is difficult for most remaining business owners. A buy-sell agreement consists of life insurance purchased by the partners on each other. If one owner dies, the insurance payout provides the funds necessary for the remaining owners to purchase the deceased owner’s share of the business.

Don’t wait until it’s too late to find out your business should have planned for an owner’s passing. Prepare now with a buy-sell agreement so your business has the plan it needs for transfer of ownership at an agreed fair price, business survival, and funds that help the remaining owners purchase shares.


SWBC Will Help YouCreate the Best Plan for Your Business

Compare Options

There are numerous plan options available for buy-sell agreements. Your SWBC advisor will explain your choices and guide you to the best plan design for your business.

List Value

Your buy-sell agreement must be based on an accurate value of your business. Your SWBC advisor will help you find the fair, correct value of your business and adjust that value over time.

Plan for the Future

Part of your buy-sell agreement includes a clear plan for the future of your business after the plan goes into effect. The experts at SWBC will help you craft, document, and implement those plans.

You worked hard to build your business. Make sure your wishes for its future—even in your absence—are secure.

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