This document can be used when a company wishes to enter into, through its owners, a formal written agreement on how and whether owners can sell their ownership shares. This document will probably be stored by both the company itself and the individual owners, in order to each have a record of what has been agreed. Individual entrepreneurs may also need it. For example, if an owner wanted a loyal employee to take over the business after he or she left, that agreement could be. You can also use one to leave the business to an heir – which is often a great way to reduce inheritance tax on the continuation of the business. These agreements are often compared to marital agreements for companies. They determine what happens to the ownership of the business if one of the owners (or owners) experiences life changes that could affect the continuity of the business itself. Life changes can range from divorce or bankruptcy to death. The purchase-sale contract protects the remaining business and owners from any impact on an owner`s privacy that may influence the business. Any business, even a small business, could use a buy-sell agreement. They are especially important when there is more than one owner. The agreement would infer how shares are sold in all situations — if a partner wants to retire, divorce or run away. This agreement would protect the business, so that the rights of heirs or former spouses could be accounted for without having to sell the business.

You should consider entering into a repurchase agreement if: A purchase sale form contains details on who may or may not purchase the shares of the abandoned or deceased owner, how to determine the value of the shares and the events that lead to the entry into force of the purchase-sale agreement. A buy-back contract provides a concrete way to protect your business`s future and ensure it goes beyond your commitment. Each company is unique in structure. A deal with several co-founders would have a more complicated buyout contract. While an individual business is often easier to design and execute. This list is intended to give you a general overview of the clauses and scenarios that should be considered in most sales contracts. Buy-sell agreements protect your business from future problems by consolidating what happens when an owner wants to sell – or needs to sell his share of the business. This agreement describes who can buy an owner`s interest, what the price will be and what will happen to an owner`s party if he dies, is disabled, retires, goes bankrupt or divorces. There are a number of ways to protect this business, regardless of the type of business. If you do not have a repurchase agreement in any of the above circumstances, your company could be subject to a partition per sale.