Do you run a small, closely held corporation, partnership, or limited liability company in Humboldt County, Trinity County, Del Norte County or Mendocino County?
If so, do you have a Buy-Sell Agreement that provides for the transfer of your ownership interest if you die, retire, become disabled, or want to sell your interest in the business?
The purpose of a Buy-Sell Agreement is to provide for an orderly transition of ownership interest on the occurrence of any number of events. In addition to those events mentioned above, a Buy-Sell Agreement can also be important when an owner files for bankruptcy, loses a required license or is voluntarily or involuntarily terminated from his or her employment in the business.
Typically, a Buy-Sell Agreement controls the circumstances under which an owner may sell his or her interest, who is a permitted buyer, and how the price paid will be determined. A well drafted agreement will anticipate potential conflicts that may create an issue in the operation of the business when an owner desires or is forced to sell his or her interest in the business.
The Buy-Sell Agreement benefits the business and its owners by allowing the remaining owners to determine with whom they will work and share control of the business; preventing outsiders or heirs, whose interests may conflict with those of the remaining owners of the business, from obtaining an ownership interest; insuring the continuation of management and control by the remaining owners; and providing for the orderly transfer of the owners’ interests in the event of death, disability, retirement or other forced or voluntary withdrawal.
A Buy-Sell Agreement can also create a market for the shares of the deceased, retiring, or withdrawing owner, and it can generate cash to pay for estate taxes and estate settlement costs.
The attorneys of the Janssen Law Firm are experienced in assisting clients in the preparation of these types of agreements, as well as providing advice with most issues that present themselves to small business owners. If you need legal assistance in preparing a Buy-Sell Agreement, or in any other aspect of your business, please contact us
Posted in Business Law, Dennis Reinholtsen | No Comments »
Tags: Business Law, Employment Law