When a non-public business has multiple owners, they need to make sure that they have executed Buy/Sell Agreements with each of them. This agreement sets the value of the business and will be used in any event that results in a change in ownership. Thus, this agreement should be reviewed and updated regularly.
Most business owners dream big and approach their operations with the best intentions, especially when going into business with other people. It can be compared to a marriage; while many of these ventures work out, some may result in divorce. In those cases, your Buy/Sell Agreement helps outline and determine how the sale of shares should be divided and dealt with. Some companies may even opt to purchase life insurance to provide liquidity upon an owner’s death to support the buy-out provision of this agreement.
The Prager Metis CFO Advisory Services team is well-versed in working with your company’s lawyers to structure your Buy/Sell agreements. We partner with our Business Valuations experts to ensure a fair market valuation for your company. Contact us today for more information!