What is a buy-sell agreement?

A buy-sell agreement, also known as a business succession plan, is an important legal contract used in business formation law in Washington. It is a type of contract between business owners that defines the rules for situations where a partner may need to leave the business, such as death, disability, retirement, or bankruptcy. The buy-sell agreement typically describes the circumstances in which a partner may be required to sell their shares and to whom they must sell them, usually the remaining partners. It also defines the price for such a sale, which is typically the fair market value of the shares. The buy-sell agreement will also state how the remaining partners can buy the shares and on what terms. This ensures that the remaining partners can buy the shares, reducing the risk of the company having to be sold or liquidated. Another important part of the buy-sell agreement is the dispute resolution process, which states how conflicts between partners will be resolved. This reduces the risk of costly and time-consuming litigation. Overall, the buy-sell agreement is an essential document in any business formation law in Washington, as it provides protection for both the business and the business partners. It creates an orderly process for the transfer of ownership, maintains the continuity and stability of the business, and ensures that the partners will be fairly compensated in the event of a sale.

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What is a buy-sell agreement?

What is a buy-sell agreement?

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