Buy-Sell Agreements Attorney in Houston, TX
A buy-sell agreement is a contract between business partners or shareholders which may protect the assets of the business and the interests of the partners and shareholders before disputes arise.
How does a buy-sell agreement work?
A typical buy-sell agreement is incorporated into a company’s governing documents or it can exist as a stand alone agreement. The agreement will define the circumstances that trigger its effect. The agreement will define who the eligible purchasers are. The agreement will provide a method for valuing the business and the terms for conducting the purchase.
Why would you want a buy-sell agreement?
There are a number of reasons why business owners might want a buy-sell agreement but they all boil down to protecting business. The buy-sell also ensures that that when one person enters a business relationship with another, they have clearly defined all those who may one day gain an interest in the company through unforeseen events.
For example, the divorce of a business partner might trigger a requirement that the separating spouse sell any interest awarded as part of the divorce back to the business. A partner’s decision to seek dissolution could trigger a buy-sell agreement, allowing the business to continue on. The death of a partner could trigger a buy-sell agreement, ensuring the business interest is not transferred to the estate.
Contact us for a free consultation at 281.407.6244.