A buy–sell agreement, also known as a buyout agreement, is a legally binding agreement between co-owners of a business that governs the situation if a co-owner dies or is otherwise forced to leave the business, or chooses to leave the business. A buyout triggered by the death of a business partner is best funded with life insurance on the participating owners’ lives.
It may be thought of as a sort of premarital agreement between business partners/shareholders or is sometimes called a “business will”. An insured buy–sell agreement is often recommended by business-succession specialists and financial planners to ensure that the buy–sell arrangement is well funded and to guarantee that there will be money when the buy–sell event is triggered.
“Secure your Buy/Sell Agreement with a Life Insurance Plan for your Business Owners”