Business Succession Planning
Buy-Sell Planning

Explore Buy-Sell Planning
Offering a full BUY/SELL Course
Above all, the goal of Buy-Sell Planning is certainty. You have the ability to prescribe the rights and obligations of the owner(s) of a business as well as the terms upon which the ownership interests may pass. Uncertainty can lead to impasse, litigation, lack of leverage in negotiation, and lost enterprise value.
You may create a separate Buy-Sell Agreement (“BSA”), or you may insert Buy-Sell Planning provisions into broader shareholder agreements, operating agreements, partnership and joint venture agreements, and bylaws.
Your circumstances will dictate which is the best path for you to take. Aside from certainty, reasons for a BSA include:

Business Succession Planning
Restricting certain transfers
The entrepreneurial venture is usually a small business enterprise as well as a privately held entity. Consequently, restrictions on transfer are often necessary to protect the company and your objectives. For example, a transfer could be prohibited and declared void in all respects if it is made to a transferee that: a) would violate an entity’s existing S corporation election, b) is not your descendant, or c) is not consented to by a stated voting percentage, including unanimous. This type of provision ensures the ownership interests never end up in the wrong hands, as defined by you.
Creating a Class of “Permitted Transferees”
While restrictions may be necessary, it may also be desirable to create a class of potential transferees who may receive ownership interests without any prohibitions. Generally, this class of “permitted transferees” may include existing owners, your descendants, an estate planning trust for your benefit, any entity controlled by you, and perhaps key employees.
Clarifying the appropriate “trigger events"
At the core of the BSA are the various trigger events upon which the buy-sell provisions take effect. Most commonly, the BSA will deal with the contingency of the current owner’s death. The BSA creates a binding obligation for the estate of the deceased owner to sell, and the prospective purchaser to buy, the ownership interests of the deceased owner.
And while planning for death is the most common driver to the BSA, there are a variety of triggers of equal, if not even greater, importance.
They include:
- Disability
- Voluntary transfer
- Involuntary transfer
- Retirement
- Resignation (before a specified retirement age)
- Attainment of stated return or economic threshold
- Divorce
- Bankruptcy
- Loss of professional license
- Termination
- Dispute
- Passage of a stated period of time
- Conviction of a crime
- And anything else that fits your circumstance
More Business Planning
News & Education
Retirement planning is an essential part of personal finance, and one of the most vital components o…
The best way to get the point across is with examples. For the examples, we will convert a $500,000 IRA. We used a 1.2% average mutual fund expense on the money in the IRA and a 7% annual rate of return. We will have the clients take income at age 70 for 15 years. We assumed the clients file taxes as married filing jointly and live in a state with NO income tax
Business Owners - The Bulk of Your Estate
1) Corporate Contingency Plan
2) Successor Directors Stated in Annual Minutes
3) Limited Power of Attorney for Business Matters
4) Shareholder Agreement
Are You Wondering if Your Business is Set Up Properly
An absence of thoughtful buy-sell planning can lead to loss of value, litigation, and failed transition for your business interests upon a wide range of trigger events.