Group Income Protection Insurance, also known as Group Salary Continuance Insurance, is an essential risk mitigation strategy for employers. It ensures that you can meet your legal obligations and avo …
Buy Sell Agreements
Have you thought about what would happen to your business if something happened to one of the business partners? Without the right legal agreements and insurance policies in place, the death or permanent disability of a major shareholder can mean having to sell shares, liquidating the business or accepting a new shareholder.
Buy-Sell Agreements, also known as a Business Will, a Business Protection Plan or Buy/Sell Insurance, are a protection against this eventuality. A Buy-Sell Agreement is a legally binding agreement between shareholders that governs the situation if a shareholder dies or is otherwise forced to leave the business or chooses to leave the business.
Do I need a Buy-Sell Agreement?
If you co-own all or part of a business – any business – a Buy-Sell Agreement is essential. Specific events that may trigger a Buy-Sell Agreement include death, trauma, long-term disability, retirement or bankruptcy.
What can a Buy-Sell Agreement cover?
A Buy-Sell Agreement can provide the funds for the buyout of one shareholder’s interest by the other shareholder(s) in the event of bankruptcy, death or total and permanent disability.
Other things to consider
When considering Buy-Sell Agreements, it is prudent to get the advice of a specialist to guide you through the process. Whatever you spend, it will be a drop in the bucket compared to what it can save you.