Primerica Shareholder Services

Your company's status as an S corporation with the Internal Revenue Service won't affect the buyout transaction between you and your partner. Under state law, ownership of a corporation is vested in shares of stock. One stockholder can buy out another stockholder simply by purchasing his shares.

Life insurance is an effective tool that business owners can use to implement the provisions of a buy-sell agreement by providing liquidity at the death of an owner to both his or her business and family.

A buy sell agreement is a critical part of small business succession planning. While there's a lot that can go into a buy sell agreement, the main things to include are the trigger events, buyout structure, value of the business, and how the agreement will be funded (with insurance or someother way).

A buy and sell agreement is a legally binding contract that stipulates how a partner's share of a business may be reassigned if that partner dies or otherwise leaves the business.The buy and sell agreement is also known as a buy-sell agreement, a buyout agreement, a business will, or a business prenup.

A buy and sell agreement is a legally binding contract that stipulates how a partner's share of a business may be reassigned if that partner dies or otherwise leaves the business. Most often, the buy and sell agreement stipulates that the available share be sold to the remaining partners or to the partnership.

The premiums used to fund a buy-sell agreement are not tax deductible. The payment of premiums made by a business, where the shareholder or the owner is the insured, are not considered taxable income.

Agreed value. You can set a value in the buy-sell agreement. Book value. Multiple of book value. Appraised value.

A buy-sell agreement consists of three common elements: a triggering event, a valuation method and a funding strategy.