A Buy Sell Agreement (BSA) often covers what happens when an owner retires, goes bankrupt, becomes disabled, gets divorced, or dies. A buy sell agreement is made between owners, partners, or members describing the circumstances of what will happen to a person’s share in the business if one of the principals leaves the business, or in case of possible buyout of the assets. A buy-sell agreement is like a pre-marital agreement. It attempts to resolve issues in a break-up so that the value of the assets is preserved and the business can continue. It provides for fair treatment for all parties, describes events that trigger a buyout, and establishes a price to be paid for assets or shares in the business.
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