Now’s the time to revisit your buy-sell agreement
Abstract: This is a good time for owners of closely held businesses to review their buy-sell agreements, particularly their valuation provisions. The economic crisis has been tough on everyone, and many business owners have seen the value of their shares decline. If a buy-sell agreement’s terms don’t reflect current conditions, the interest may be priced too high. And this can result in higher estate taxes and hurt the business or its surviving owners. This article describes the benefits of a buy-sell agreement, but also warns against relying too casually on standard valuation formulas.