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Buy / Sell Agreements

 

What is a Buy / Sell Agreement?

Basically speaking, a Buy/Sell Agreement is a written agreement between business owners detailing how the ownership of the business will be transferred should specific events occur.  Typically these trigger events involve the untimely death or invalidity of a business partner.

 

How do Buy / Sell Agreements work?

The agreement will detail how the business ownership will be transferred should one of the business partners be unable to fulfil their role.  Often this involves the continuing business partner/s acquiring the business for a nominal sum and the departing partner (or their family) being financially compensated through an insurance policy.  The agreement will also detail the valuation rationale to be used to determine the amount of consideration to be paid to the departing partner.

 

What if I don’t have a Buy / Sell Agreement?

There are many potential consequences, some of which could prove to be devastating to a business.

These include:

  • Being forced to run a business with disinterested, unqualified or uncooperative partners
  • Wanting to buy out a partner but not having the financial means to do so
  • Wanting to be bought out but your partner/s not having the financial means to do so
  • Wanting to buy out the business but the other party is unwilling to sell

 

Where do I start?

The best place to start is with your financial planner who will help you work through the process with the involvement of your accountant and solicitor where required.

Please contact Altitude Advisory for more information.

"We had been grappling with some concerns regarding succession, business strategy and family dynamics in our business. We couldn't have found a better financial, management, inter-relationship coach and mentor than Andrew Mattner. Andrew gives us his genuine attention, clarity and friendship."

Gloria Rowett, Marion Holiday Park

"Altitude Advisory works with us to find ways to improve our business unlike accountants we have used in the past who were only interested in taking the figures and doing our tax. They're always approachable and call us for a chat which shows us they're truly interested in our business."

Kerri Stutley, Tumby Bay Foodland