BUY AND SELL AGREEMENTS

Memphis Buy And Sell Agreements Lawyer

When you start a business, you do not immediately think about events that can threaten the longevity and continuity of your business operations. But your death, the death of a corporate owner, or a divorce can quickly turn your business plans upside down. What can you do, for example, if one of your corporation’s owners dies and someone who is not aligned with your interests wants to purchase the deceased owner’s shares? Or, what should you do if a court determines that your co-owner’s shares in your company are marital property and part of these shares should be awarded to her soon-to-be ex-husband?

In light of the above, a buy-sell agreement (or buy and sell agreement) is an important tool in protecting your business from an uncertain future. The drafting and execution of these agreements takes knowledge and skill, and as such, it is critical to contact Douglass & Runger, PLLC, Attorneys at Law, today to learn more about your legal rights and options.

What Is A Buy-Sell Agreements?

Simply put, a buy-sell agreement is a contract between the various owners of a business whereby the owners give themselves the opportunity to purchase the shares or ownership interest under certain conditions. The conditions that are most often the subject of a buy-sell agreement are death and divorce, as follows:

In the event of the death of the owner
The remaining owners should have an opportunity to purchase that owner’s shares from the owner’s estate for then-current price of the shares. The remaining owners would then be free to do what they wish with the shares – either retain them or sell them to another person. In this instance, the buy-sell agreement would prevent the owner’s estate from obtaining control of the shares and distributing them to the owner’s heirs and beneficiaries who may or may not have the interests of the company at heart.
In the event of a divorce
The owners of the company would be given the opportunity to purchase any shares that would be distributed or divided and given to the non-owner spouse (again at the then-current value of the shares). This would prevent the non-owner spouse from obtaining an ownership interest in the company and being able to affect the course and direction of the company and prevent the owner-spouse from having his or her ownership interest in the business diminished.

The valuation method for shares to be purchased by the business can be any lawful method provided for in the agreement. In other words, the business does not have to agree to purchase shares back at their then-current value. So long as the signatories to the buy-sell agreement agree to the valuation method, the same could be enforced by the court.

Execution Of The Buy-Sell Agreement Is Important

A buy-sell agreement is of little value if it cannot be enforced due to issues with its enforcement. Individuals with ownership interests in the business should be made to sign a buy-sell agreement as should their spouses. In order to prevent a court from declaring the buy-sell agreement invalid, each signatory should be afforded the opportunity to consult with legal counsel of their own choosing before signing the buy-sell agreement.

Seek Assistance From An Experienced Memphis Buy-Sell Agreement Attorney

A buy-sell agreement can be a powerful tool to protect your business from unexpected future events, but only if it is properly drafted and executed. At Douglass & Runger, PLLC, Attorneys at Law, we can assist you in protecting your business using these agreements. We will draft an appropriate buy-sell agreement in accordance with your objectives and ensure the same is properly executed and signed by the necessary parties. Enlist our help by calling us today at (901) 388-5805.

Let Us Help

For more information about our firm and our approach to the practice of elder law, contact our office. Call (901) 388-5805 to schedule a confidential consultation and case review today. Douglass & Runger, Attorneys at Law, serve clients throughout Memphis, Shelby County, and the surrounding areas.

Let Us Help

For more information about our firm and our approach to the practice of elder law, contact our office. Call (901) 388-5805 to schedule a confidential consultation and case review today. Douglass & Runger, Attorneys at Law, serve clients throughout Memphis, Shelby County, and the surrounding areas.

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Practice Areas
Family Law Adoption Business Law Divorce Probate