Plan for business continuity with buy-sell agreements

Buy-sell协议

没有适当的计划, the premature death of a business owner may result in the business being liquidated, 对外出售, or surviving family members may have to become active in the business. To plan for the orderly disposition of the business, a buy-sell agreement should be considered.

A buy-sell agreement can be between shareholders of a corporation, 合伙企业的合伙人, or a 关键员工 and a sole proprietor. The agreement obligates the surviving business owners, 关键员工, or the business itself to purchase the interest of the deceased owner. An attorney will need to prepare the buy-sell agreement.

Advantages of a properly drafted buy-sell agreement

• Creates a guaranteed market for the business interest.
• Allows those who are interested in continuing the business to do so without interference from the deceased owner's heirs.
• Provides liquidity for the estate of the deceased owner by turning the business interest into cash.
• Establishes the value of the business for federal estate tax purposes.

协议类型

A buy-sell agreement may be structured in one of three ways. You should seek the advice of your tax advisors to determine which is best for you.

• 交叉购买 — This type of agreement involves the business owners (shareholders or partners) entering into an agreement among themselves w在这里by the surviving owners are obligated to buy the interest of the deceased owner, and the estate of the deceased owner is obligated to sell.
• 实体 — This type of agreement binds the business itself to buy the interest of the deceased owner, and the estate of the deceased owner is obligated to sell. If the business is the corporation, this entity agreement is sometimes referred to as a stock redemption agreement.
• 等着瞧 — If it seems difficult to decide whether to use cross purchase or entity, a "Wait and See" may be utilized. This type of agreement allows flexibility in that it is not decided until the owner's death whether the surviving owners or the business purchases the interest of the deceased owner.

W在这里 does the money come from to purchase the business interest?

业主个人资金 — Most business people do not keep large sums of liquid assets that would be needed to purchase the deceased owner's interest. Most money would be in their businesses.

偿债基金 — The premature death of an owner may not give the business time needed to accumulate the purchase price.

借入资金 — A bank may not be willing to lend money to a business that has recently lost an owner or the cost of the interest of the loan may be excessive.

分期付款 — The heirs of the deceased owner may not get the sum or money needed to settle death costs and t在这里 is no guarantee future payments will be received if the business fails.

人寿pp王者电子官网 — T在这里 are many advantages life insurance offers that the other alternatives do not:

• 人寿pp王者电子官网 annual premiums are often a small fraction of the death benefit.
• Death benefits are available when needed, regardless of when the owner dies.
• Death benefits are generally federal income tax-free.

A State Farm®代理 can help you choose an insurance program that will meet your objectives.