Where there are multiple owners of a business, they should ensure succession of the business upon the happening of the death, total and permanent disability or traumatic illness of key lives in the business (‘critical events’). This can be achieved by having an appropriate succession plan in place to address what must happen upon a critical event occurring.
We can assist you with implementing a business succession plan by consulting with your insurance brokers as to appropriate insurances including key person insurance and policies to cover debts of the business and funding to buy out a partner’s interest upon the happening of a critical event.
Further, to prepare a buy sell agreement which defines the buy-out terms between the partners and the funding arrangements to that the partners agree to sell their interest in the business to the other partners upon the happening of a critical event and each partner agrees to purchase the interest of the outgoing partner.
Buy-sell agreements can also deal with some other related matters including how the value of the interest will be determined, how it will be transferred and how it will be funded.
Should you require more information on business succession planning and buy sell agreements please contact our business succession law team on 5526 0157.