You never need a Buy-Sell, until you really need it.
In the event of the death of a partner or major stockholder in a privately held company, immediate problems can arise if prior planning hasn’t anticipated and taken steps to remedy them.
Do you want to be in business with your partner's family?
One of the first things to come to the minds of the surviving partners and shareholders is – does this mean I’m now in business with my deceased partner’s heirs? His or her spouse and children?
Can the business afford to continue income to a non-active partner?
Not far away, the widow or widower may well be thinking – do I keep getting the income that I’m used to from the company? Do I continue to share in growth and appreciation of the company and its business?
What does a Buy-Sell accomplish?
A buy-sell agreement anticipates and resolves those any many other questions long before they come to the fore. Valuation of the company, provision for funds to allow the surviving partners or shareholders to buy the decedent’s share of the company from his heirs, and other essential potential issues are examined, considered, and put to rest. By doing this long before a significant emotional catastrophe occurs, it prevents the emotional crisis from being compounded by a financial crisis, both for the heirs, and for the ongoing operation of the business.
Every business can benefit immensely from a detailed and involved examination of the many potential concerns that may arise in this kind of situation. We at Polaris have been deeply involved in this area of planning for nearly forty years, and stand ready to work with you in exploring what might be the best approach for you and your firm. |
