Download As Word Legal Missouri Buy-Sell Forms For Free

Disadvantages: (1) The fixed price becomes outdated due the constant evolution of a business; (2) Owners seldom know the true value of a business and set unrealistic prices; and (3) Different triggering events may cause different values (i.e., death of an owner, retirement of an owner, removal of an owner, etc.).

The Trigger Events In addition to an owner separating from the business, other triggering events include the passing of an owner, a divorce, a bankruptcy or an injury or disability as well as a material breach of certain contractual or fiduciary obligation of an owner.

How to set up your buy-sell agreement Start early. Just as you would with any other binding legal document, you'll want to establish a buy-sell agreement as early as you can. ... Set up ground rules. ... Take out life insurance policies. ... Include a valuation clause. ... Pay attention to taxes.

Any stakeholders, including partners or owners, and their current stake in the business' equity. Events that would trigger a buyout, such as death, disability, divorce, retirement, or bankruptcy. A recent business valuation. The structure by which partners would buy or sell their interest in the business.

For example, three doctors could form a joint practice, and the doctors can agree to a buyout agreement where all remaining doctors can buy a doctor's ownership for $1,000,000 upon retirement.

What Is a Cross-Purchase Agreement? A cross-purchase agreement is a document that allows a company's partners or other shareholders to purchase the interest or shares of a partner who dies, becomes incapacitated or retires.