There are two different types of buy-sell agreements: cross-purchase and redemption, although your agreement could be a combination of these.
One of the considerations that you’ll face when you start a partnership is whether it will live in perpetuality or end upon the death or exit of one or more of its partners. Clearly, the latter would not be ideal in most situations, as it can leave the other partners in a precarious place. To avoid that scenario, most partnerships set up buy-sell agreements to stipulate what happens to a partner’s share if they leave the company. At Tarantino Law, PLLC, our team can be very helpful when you start a business. We can prepare the many different documents you’ll need and be sure that you understand them. Buy-sell agreements are important to have in place so that everyone has an understanding and is in agreement as to the transfer of a partner’s share.
There are two different types of buy-sell agreements: cross-purchase and redemption, although your agreement could be a combination of these. We will tailor your agreement based on your situation while staying within business law dictates. Cross-purchase buy-sell agreements include a provision where the remaining partners are able to buy the interests of the partner who has died or is leaving. Redemption agreements include a provision that dictates that the business must purchase the interests. A combination situation would outline that some portion could be bought by remaining partners with the rest bought by the company.
There are other considerations and aspects of buy-sell agreements involved which we are more than happy to discuss with you when they pertain to your situation. Reach out today to schedule a consultation to learn more and to get this document and others prepared for your new Mooresville, North Carolina venture.