Buy-Sell Agreements – A Must for Start-Ups with Multiple Owners
A new post on the website of Dickinson Mackaman Tyler & Hagen which discusses what happens if the owners of a business decide to part ways.
A buy-sell agreement addresses voluntary separations – i.e. an owner wants to retire, finds other interests or simply loses the spark with his/her co-owners, explain authors Amy Plummer and Laura Wasson. The agreement also covers involuntary separations – events no one wants to think about, much less plan for – things like bankruptcy, becoming disabled, or passing away.
Their article covers general voluntary buy-sell terms, general involuntary buy-sell terms, tag-along rights, drag-along rights, put options, and a Texas shoot-out. They also discuss provisions for calculating the valuation of the exiting owner’s interest.
