A buy-sell agreement is an agreement between the owners of the business for purchase of each others interest in the business. Such an agreement will spell out the terms governing sale of company stock to an outsider and thus protect control of the company. It can be triggered in the event of the owner's death, disability, retirement, withdrawal from the business or other events. Life insurance owned by the corporation is often used to provide the funds to purchase the shares of a closely held company if one of the owners dies.
The time to prevent disputes is before they occur. Experience proves that owners anxieties created in dealing with one another are inversely proportional to the effort they spend addressing business problems in the event that they should happen. Dealing with these contingencies before they manifest themselves is the secret to a harmonious business relationship with other owners, Use the checklist below to determine areas where you may need assistance.
New Jersey Checklist — Buy/Sell Agreement— - Contingencies When entering into a buy/sell agreement in New Jersey, it is essential to ensure that all necessary contingencies are included to protect the interests of both the buyer and the seller. Contingencies are provisions that allow parties to proceed with the transaction only under certain specified conditions. The following is a detailed description of the typical contingencies that should be considered in a New Jersey buy/sell agreement: 1. Financing Contingency: This contingency allows the buyer to back out of the agreement if they are unable to secure the necessary financing to complete the purchase. It is crucial to specify a reasonable deadline for the buyer to obtain financing approval, and if they fail to do so by the deadline, either party can terminate the agreement. 2. Home Inspection Contingency: It is strongly recommended including a contingency that allows the buyer to conduct a thorough inspection of the property by a qualified professional. If significant issues are discovered during the inspection, the buyer may request repairs or negotiate a reduction in the purchase price. If the seller is unwilling to make satisfactory adjustments, the buyer can terminate the agreement. 3. Appraisal Contingency: This contingency safeguards the buyer's interests by allowing them to obtain an appraisal of the property to ensure that its value aligns with the agreed-upon purchase price. If the appraisal comes in lower than the purchase price, the buyer can negotiate for a lower price or terminate the agreement. 4. Title Contingency: A title contingency is crucial to protect the buyer by ensuring that the property has a clear and marketable title, free from any liens or encumbrances. If the title search reveals any issues, the buyer can request the seller to resolve them before proceeding with the purchase. 5. Contingencies for Selling Another Property: In situations where the buyer is selling their current property to finance the new purchase, a contingency can be included to give the buyer a specific time frame to sell their property. If they are unable to sell within the agreed-upon period, either party can terminate the agreement. 6. Home Sale Contingency for Seller: Conversely, if the seller is relying on the proceeds from the sale to purchase another property, a home sale contingency can be included to allow the seller to cancel the agreement if their property doesn't sell within a given time frame. It's important to note that these are just a few common contingencies used in New Jersey buy/sell agreements, and the specific needs of each transaction may require additional or customized contingencies. Working with experienced real estate professionals or attorneys can help ensure that all necessary contingencies are included and adequately protect the interests of all parties involved in the transaction.New Jersey Checklist — Buy/Sell Agreement— - Contingencies When entering into a buy/sell agreement in New Jersey, it is essential to ensure that all necessary contingencies are included to protect the interests of both the buyer and the seller. Contingencies are provisions that allow parties to proceed with the transaction only under certain specified conditions. The following is a detailed description of the typical contingencies that should be considered in a New Jersey buy/sell agreement: 1. Financing Contingency: This contingency allows the buyer to back out of the agreement if they are unable to secure the necessary financing to complete the purchase. It is crucial to specify a reasonable deadline for the buyer to obtain financing approval, and if they fail to do so by the deadline, either party can terminate the agreement. 2. Home Inspection Contingency: It is strongly recommended including a contingency that allows the buyer to conduct a thorough inspection of the property by a qualified professional. If significant issues are discovered during the inspection, the buyer may request repairs or negotiate a reduction in the purchase price. If the seller is unwilling to make satisfactory adjustments, the buyer can terminate the agreement. 3. Appraisal Contingency: This contingency safeguards the buyer's interests by allowing them to obtain an appraisal of the property to ensure that its value aligns with the agreed-upon purchase price. If the appraisal comes in lower than the purchase price, the buyer can negotiate for a lower price or terminate the agreement. 4. Title Contingency: A title contingency is crucial to protect the buyer by ensuring that the property has a clear and marketable title, free from any liens or encumbrances. If the title search reveals any issues, the buyer can request the seller to resolve them before proceeding with the purchase. 5. Contingencies for Selling Another Property: In situations where the buyer is selling their current property to finance the new purchase, a contingency can be included to give the buyer a specific time frame to sell their property. If they are unable to sell within the agreed-upon period, either party can terminate the agreement. 6. Home Sale Contingency for Seller: Conversely, if the seller is relying on the proceeds from the sale to purchase another property, a home sale contingency can be included to allow the seller to cancel the agreement if their property doesn't sell within a given time frame. It's important to note that these are just a few common contingencies used in New Jersey buy/sell agreements, and the specific needs of each transaction may require additional or customized contingencies. Working with experienced real estate professionals or attorneys can help ensure that all necessary contingencies are included and adequately protect the interests of all parties involved in the transaction.
