A valuator’s insight into buy-sell agreements

Description

Abstract: Buy-sell agreements provide much-needed protection when an owner involuntarily leaves — or voluntarily wants out of the business. A comprehensive agreement not only defines the term “value,” but it also incorporates buyout terms and includes provisions for various buy/sell scenarios and contingencies. This article explains the importance of a valid buy-sell agreement and the significant role an appraiser plays in ensuring the agreement is sound — thus minimizing potential conflicts down the road. A sidebar discusses using key-person insurance to fund buyouts.