What is a buy-sell agreement?

A buy-sell agreement, also known as a business succession agreement, is a document that is often used in business formation law in South Carolina. It is an agreement between the owners of a business that outlines what will happen in the event of the death, disability, separation, or retirement of one of the owners. The agreement is used to ensure that the ownership interest in the business is transferred to the right parties in the event of a change in the ownership. Typically, the agreement is funded by the owners’ life insurance policy or by other means, such as a bank loan. The agreement outlines what will happen if one of the owners dies, becomes disabled, or otherwise leaves the business. It typically outlines a process for the value of the business to be determined and for the transferring of ownership to the other owners. Additionally, it can also be used to set up a system of buying and selling shares between the owners. In South Carolina, it is important that the buy-sell agreement is well-drafted and that all parties involved understand its terms. If the agreement is unclear or if it is not followed, the result can be a dispute among the owners that can be expensive to resolve.

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What is a buy-sell agreement?

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