Buy-Sell Agreement

Definition - What does Buy-Sell Agreement mean?

A buy-sell agreement Is a contract that is arranged between the owners of a business. This contract includes the terms in which a withdrawing owner will be bought out by the rest of the owners. The price that the withdrawing person will be paid, as well as other key details for the negotiation, are laid out in the contract

Justipedia explains Buy-Sell Agreement

Buy-sell agreements serve to make sure that if one partner pulls out of a business, everything is dealt with in an orderly fashion. A partner or a co-owner leaving a business can create significant changes within a company. Buy-sell agreements help to ensure that both the withdrawing party and the remaining party can reach a fair deal as to how much the withdrawing party should be bought out for when they leave. Buy-sell agreements are legally binding.

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