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Buy Sell Agreement Between Partners of a Partnership

Partnership Selling Examples In Miami-Dade

Category:

Contracts - Buy Sell - Agreements

State:

Multi-State

County:

Miami-Dade

Control #:

US-00443

Format:

Instant download

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Description

The Buy-Sell Agreement is designed for partners in a general partnership, particularly in the Miami-Dade area, to clearly outline the terms for the sale of a partner's interest during their lifetime or after their death. This agreement ensures that interests can be transferred smoothly and fairly, providing a mechanism for valuation and funds acquisition for purchasing interests. Key features include the stipulation of ownership percentages, conditions governing withdrawal, and the purchase procedure upon a partner's death, including the use of life insurance to fund these transactions. The form also includes various schedules for partners to record updated valuations of their interests, ensuring clarity in the financial aspects of the partnership. For the target audience—including attorneys, partners, owners, associates, paralegals, and legal assistants—this document serves as a vital tool to safeguard their interests and facilitate seamless transitions in partnership dynamics. It is essential to fill out the initial sections accurately and maintain the schedules for valuation to support ongoing business operations effectively. Legal guidance may be necessary for amendments, ensuring compliance with local laws and partnership terms.

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Each party is at least 18 years old and is competent to enter into a contract. Neither party is married, or is a partner to another domestic partnership relationship. Each party is the sole domestic partner of the other person.

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A valid domestic partnership relationship may be registered by any two (2) persons by filing a declaration of domestic partnership with the Miami-Dade Consumer Services Department, which declaration shall comply with all requirements set forth in this chapter for establishing such domestic partnership.

All benefits-eligible employees may add their domestic partner to the extent allowed under the domestic partner coverage conditions as stated in the Affidavit of Domestic Partnership.

Domestic partnership termination Either partner of a registered domestic partnership may terminate such relationship by filing a notarized Declaration of Termination of Domestic Partnership Relationship. Upon receipt of a completed application, you will receive a letter certifying the termination.

7 Steps to Start a Business in Miami Choose Your Miami Business Structure. Register Your Business. Apply for a Federal EIN. File Your Federal BOI. Register for Florida Business Tax. Obtain Florida Licenses. Obtain Miami-Dade License and Certificates.

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Buy Sell Agreement Between Partners of a Partnership

BUY-SELL AGREEMENTS

Introduction

A buy-sell (business purchase) agreement is an agreement between the owners of the business for purchase of each others interest in the business. The buy-sell can be triggered in the event of the owner's death, disability, retirement, withdrawal from the business or other events.

Reasons For The Agreement

Establish the value of the business for federal and state death tax purposes.

Unwilling to continue the business with the family of a deceased co-owner.

Prevent all or part of the business from falling into the hands of "outsiders."

The Agreement Basics

The agreement provides for the purchase price, terms and funding arrangements. The agreement obligates the retiring or disabled owner or owner's estate to sell the business to the business itself, or to the surviving owner(s), or maybe an option of either.

Types Of Agreements

The Buy-Sell agreements can take several forms, such as:

An agreement between the business and the individual owners (stock redemption agreement or stock retirement plan).

An agreement between the owners (a cross purchase or "criss-cross" agreement).

An agreement between the owners and key person, family member or outside individual (a "third party" business buy-out agreement).

A combination of the foregoing.

Basically, these are either a Cross Purchase Plan or Entity Purchase Plan.

Cross Purchase Agreement

Each partner agrees with each of the other partners to purchase his or her share of the business at the time of death. The Partners may take out a life insurance policy on the life of the other(s) to fund the obligation. At the time of the first death, the surviving partner(s) collects the insurance proceeds. The survivor then uses the insurance proceeds to buy the business share from the deceased's family. This type agreement can be used with two or more partners.

Entity Purchase Plan

Each partner agrees that upon death his or her share of the business will be sold back to the business. The business may buy life insurance policies on each of the partners to fund the obligation. At the death of a partner, the business collects the insurance proceeds and buys the business interest from the deceased partner's heirs.

Transfer Restrictions

The agreements commit the owners not to sell ownership in the business prior to death, without first offering it to the persons named in the agreement. This is called a right of first option or refusal.

Life Insurance to Fund the Agreement

Whole life insurance has generally been used to fund a buy-sell agreement.

The life insurance industry also offers "Business Value Life Insurance" with a death benefit determined by the value of the business rather than the terms of the policy. The death benefit can grow as the value of the business grows. Premiums may also be higher as the death benefit increases.

Purchase Price

The purchase price can be based on an appraisal, set predetermined price, book value, or a formula of assets and earnings.

Payment Terms

Agreements may provide that the price will be paid in cash, in installments, or other means. You may also select a combination of cash and installments. Of course, if the insurance proceeds are sufficient to pay the price in cash many agreements provide that the purchase is to be paid in full in cash from the insurance proceeds.

Buy Sell Agreement Between Partners of a Partnership

BUY-SELL AGREEMENTS

Introduction

Reasons For The Agreement

Establish the value of the business for federal and state death tax purposes.

Unwilling to continue the business with the family of a deceased co-owner.

Prevent all or part of the business from falling into the hands of "outsiders."

The Agreement Basics

Types Of Agreements

The Buy-Sell agreements can take several forms, such as:

An agreement between the business and the individual owners (stock redemption agreement or stock retirement plan).

An agreement between the owners (a cross purchase or "criss-cross" agreement).

An agreement between the owners and key person, family member or outside individual (a "third party" business buy-out agreement).

A combination of the foregoing.

Basically, these are either a Cross Purchase Plan or Entity Purchase Plan.

Cross Purchase Agreement

Entity Purchase Plan

Transfer Restrictions

Life Insurance to Fund the Agreement

Whole life insurance has generally been used to fund a buy-sell agreement.

Purchase Price

The purchase price can be based on an appraisal, set predetermined price, book value, or a formula of assets and earnings.

Payment Terms

Partnership Selling Examples In Miami-Dade

This form is part of a form package!

Description

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FAQ

What are the requirements for a domestic partnership in Florida?

How do I register as a domestic partner in Miami Dade?

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Trusted and secure by over 3 million people of the world’s leading companies

Partnership Selling Examples In Miami-Dade

This form is part of a form package!

Description

Related forms

Viewed forms

Form popularity

FAQ

What are the requirements for a domestic partnership in Florida?

How do I register as a domestic partner in Miami Dade?

How to get a domestic partnership in Miami-Dade County?

Can you add a domestic partner to your health insurance in Florida?

How do you terminate a domestic partnership in Florida?

How to start a business in Miami?

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