Understanding Buy/Sell Agreements

A buy/sell agreement, also known as a business continuation agreement or a buyout agreement, is a legally binding contract between co-owners of a business. It stipulates how a co-owner’s share of the business may be reassigned if that co-owner passes away or otherwise leaves the business. It’s a crucial part of succession planning, ensuring the smooth transition of ownership and control of the business.

Understanding Your Business Structure and Goals

The first step in setting up a buy/sell agreement is understanding your business structure and goals. Our financial advisors can help you assess your current business structure, understand your long-term business goals, and identify potential risks or challenges to these goals.

Defining Terms and Scenarios

Once we understand your business structure and goals, we can help you develop a buy/sell agreement. This agreement will outline the conditions under which a co-owner’s share of the business can be sold, the method for valuing this share, and the process for transferring ownership. We can help you consider various scenarios, such as the death, disability, retirement, or voluntary departure of a co-owner, and ensure these are covered in the agreement.

Securing the Buyout

A key consideration in a buy/sell agreement is how the purchase of a departing co-owner’s share will be funded. Options could include cash reserves, a loan, or insurance policies. We can help you explore these options and choose the one that best suits your business’s needs and circumstances.

Regular Reviews and Updates

A buy/sell agreement should be reviewed regularly to ensure it continues to meet the needs of the business and its owners. Madd Life can provide ongoing support, helping you review and update your agreement as your business evolves.

Personalised Advice

We take the time to understand your goals and financial situation, offering clear, practical advice to help you build, protect and grow your wealth.

Full Financial Picture

From budgeting to retirement planning, we look at every aspect of your finances to create a strategy that works for your lifestyle and future.

Clear Communication

No complicated language or confusion. We explain everything in straightforward terms so you feel confident and in control of your financial decisions.

Ongoing Support

Your goals may change — and we’ll be here when they do. We offer regular reviews and support to keep your financial plan on track.

How Madd Life Can Help

Navigating the complexities of succession planning can be challenging. At Madd Life, we can guide you through the process, helping you understand the benefits, risks, and requirements of this investment strategy.

Matt Prentice

Financial Planner

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Understanding Buy/Sell Agreements

Understanding Your Business Structure and Goals

Defining Terms and Scenarios

Securing the Buyout

Regular Reviews and Updates

Personalised Advice

Full Financial Picture

Clear Communication

Ongoing Support

How Madd Life Can Help

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