[{"data":1,"prerenderedAt":525},["ShallowReactive",2],{"document-buy-sell-agreement-D12611":3},{"document":4,"label":23,"preview":11,"thumb":24,"description":25,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":26,"breadcrumb":30,"related":38,"customDescModule":177,"customdescription":25,"mdFm":178,"mdProseHtml":524},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":16,"keywords":15},"BUY-SELL AGREEMENT This Buy-Sell Agreement (this \"Agreement\") is made and effective this [Date], BETWEEN: [COMPANY NAME], a corporation organized and existing under the laws of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: Each of the Parties listed below (each a \"Shareholder\" and collectively, the \"Shareholders\"). The Shareholders desire to promote and protect their mutual interests and the interests of the Company. Therefore, the parties hereby agree as follows: ARTICLE I PARTIES AND PURPOSE PARTIES The Shareholders own all the outstanding shares (the \"Shares\") of the [COMPANY NAME] in the amount outlined below. At this time, each Shareholder's interest in the Company is as follows: __________________ owns _________________ % __________________ owns _________________ % __________________ owns _________________ % __________________ owns _________________ % While this agreement is in effect, no Shareholder shall have any right to assign, encumber or dispose of his interest in the Company except as provided herein. PURPOSE The purpose of this Agreement is to protect the Corporation's management and control from persons not acceptable to all Shareholders. The other purpose is to provide a ready market in the event of the death, disability, or lifetime transfer of Shares by a Shareholder. To this end, the Shareholders have entered into this agreement to: Restrict the transfer or sale of the Shares by the Shareholders; Ensure any sale of the Shares is in the accordance with established procedures; Provide stability and continuity in the management of the Company; Maintain ownership or control of the Company ARTICLE II SALES TRANSFER RESTRICTION ON SHARES No Shareholder (or any party acting on behalf of a Shareholder) may sell or transfer its Shares, whether owned or subsequently acquired, except in accordance with the provisions of this Agreement or with the written consent of the Company and all other Shareholders. Any attempt to sell or transfer Shares (or an interest in Shares) that contravenes the terms of this agreement is null and void and is not binding on or recognized by the Company or the Shareholders. Definition of sale or transfer. The term \"sale or transfer\" includes any sale, pledge, encumbrance, gift, bequest, or other transfer of any Shares, whether or not the transfer would be made for value, or to another Shareholder, or voluntarily or involuntarily or by operation of law, or during his lifetime or upon his death Exception. A sale or transfer of a Shareholder's Shares to a trust that is wholly revocable by that Shareholder and for which that Shareholder is the sole trustee is not a prohibited sale or transfer. However, any subsequent attempted sale or transfer by the trustee of such trust shall be subject to all of the terms of this Agreement with the Shareholder (and not the trust) deemed as the Shareholder of such Shares. Legend on share certificates. Each share certificate whether presently owned or subsequently acquired, shall have the following statement conspicuously printed on its face: \"The transfer, sale, assignment of the Shares represented by this certificate is restricted by a Buy-Sell Agreement among all the Shareholders and the Corporation dated [SPECIFY]. A copy of the Buy-Sell Agreement is available for inspection during normal business hours at the principal office of the Corporation. All the terms and provisions of the Buy-Sell Agreement are incorporated by this reference and made a part of this certificate.\" ARTICLE III VOLUNTARY TRANSFER PERMITTED SALE OR TRANSFER DURING LIFETIME Any Shareholder wishing to sell or transfer its Shares must first notify each of the other Shareholders in writing. Such Shareholder (a \"Seller\") will be deemed to have offered to sell its Shares (the \"Offering Shares\") to other Shareholders. The notice must indicate the name of the party (the \"third party purchaser\") to whom the seller wishes to sell or transfer the offered Shares and the terms of the proposed sale or transfer. First option to other Shareholders. Each of the other Shareholders will have thirty (30) days from the effective date of the notice to choose to purchase the Offered Shares in proportion to their respective ownership of all outstanding Shares (excluding the Offered Shares) or in such other proportion as the other Shareholders may agree. During this 30-day period, the other Shareholders must collectively agree to purchase all or none of the Offered Shares. If the other Shareholders exercise their call option, they must acquire the Offering Shares on the same terms as those set out in the proposed notice of sale or transfer. These conditions will be supplemented, as necessary, by the payment conditions described in Article VI below. Notice of proposed sale. Any Shareholder wishing to sell his/her Shares shall provide a Notice of Proposed Sale. The notice must specify: the name and address of each proposed transferee; the number of Shares or the interest in Shares to be transferred; the price per Share; the terms of the proposed sale, assignment, or transfer. Permitted sale or transfer to third party purchaser. When the other Shareholders do not exercise their right to purchase all the Shares offered within the 30-day period, the seller may then conclude the sale or transfer to the third-party purchaser. However, the sale or transfer must be made on the same terms and conditions as those set out in the notice to other Shareholders. In addition, the third-party buyer must agree in writing to be bound by the terms of this contract before or at the time of the sale or transfer. If the sale or transfer to the third-party acquirer is not completed within sixty (60) days of the expiry of the other Shareholder's 30-day option period, then the authorization to sell or transfer under this agreement shall be deemed to have been withdrawn as if no sale or transfer had been considered and no notice given. ARTICLE IV INVOLUNTARY TRANSFER INVOLUNTARY LIFETIME SALE OR TRANSFER Any Shareholder who holds information that could reasonably be expected to result in an involuntary lifetime sale of his or her Shares and any person or entity that has acquired or may acquire an interest in such Shares must promptly notify each of the other Shareholders in writing. The notice must describe the nature and details of the involuntary lifetime sale and must indicate the name of the party (the \"third party transferee\"). The Shareholder will be deemed to have offered to sell its Shares (the \"Offering Shares\") to other Shareholders. The following events shall each constitute an \"Involuntary\" transfer event: the death of a Shareholder; the total mental or physical disability of a Shareholder; the termination of a Shareholder's employment with [COMPANY NAME]; and the bankruptcy or insolvency of a Shareholder. First option to other Shareholders. Each of the other Shareholders will have thirty (30) days from the effective date of this notice to elect to purchase the Offered Shares in proportion to their respective ownership of all outstanding Shares (excluding the Offered Shares) or in such other proportion as the other Shareholders may agree. If the other Shareholders exercise their option to purchase some or all of the offered Shares, they must then acquire these Shares at the purchase price and on the payment, terms described in Articles VI and VII below. Permitted sale or transfer to third party transferee. If the other Shareholders do not validly exercise their option to buy all of the Offered Shares within the 30-day period, then any remaining Offered Shares may be transferred to the third-party transferee. However, the transfer must be made on the same terms and conditions as those contained in the notice to the other Shareholders",null,"Buy Sell Agreement","8",513,"doc","https://templates.business-in-a-box.com/imgs/1000px/buy-sell-agreement-D12611.png","https://templates.business-in-a-box.com/imgs/250px/12611.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12611.xml",{"title":15,"description":6},"buy sell agreement",[17,20],{"label":18,"url":19},"Finance & Accounting","/templates/finance-accounting/",{"label":21,"url":22},"Buy & Sell Shares","/templates/buy-sell-shares/","Buy Sell Agreement Template","https://templates.business-in-a-box.com/imgs/400px/12611.png","\u003Ch4>Protecting Business Continuity with a Buy-Sell Agreement\u003C/h4>\n\u003Cp>In closely held businesses and partnerships, a Buy-Sell Agreement is essential for ensuring smooth transitions of ownership and protecting business continuity. This legal document outlines the terms for buying out an owner's share in the business under specific circumstances, such as retirement, death, or disability, ensuring that all parties have clarity on the ownership transfer process.\u003C/p>\n\u003Cp>The Buy-Sell Agreement serves as a regulatory framework that defines the conditions and procedures for transferring ownership interests. By detailing the valuation methods, funding mechanisms, and buyout conditions, the agreement helps to prevent conflicts and ensures that the business can continue to operate smoothly despite changes in ownership.\u003C/p>\n\u003Ch5>What is a Buy-Sell Agreement?\u003C/h5>\n\u003Cp>A Buy-Sell Agreement is a formal document that outlines the terms for buying and selling ownership interests in a business. It establishes the rights and obligations of the remaining owners and the exiting owner's estate, ensuring a fair and orderly transfer of ownership in the event of retirement, disability, death, or other triggering events.\u003C/p>\n\u003Ch5>Key Elements of a Buy-Sell Agreement\u003C/h5>\n\u003Cp>A comprehensive Buy-Sell Agreement should effectively address:\u003C/p>\n\u003Cul>\n\u003Cli>\u003Cstrong>Triggering Events\u003C/strong> - Defines the events that trigger the buyout process, such as retirement, death, disability, or voluntary sale of an ownership interest.\u003C/li>\n\u003Cli>\u003Cstrong>Valuation Methodology\u003C/strong> - Specifies the method for valuing the ownership interests, ensuring a fair and transparent valuation process.\u003C/li>\n\u003Cli>\u003Cstrong>Funding Mechanism\u003C/strong> - Details how the buyout will be funded, such as through insurance policies, cash reserves, or external financing.\u003C/li>\n\u003Cli>\u003Cstrong>Purchase Terms and Conditions\u003C/strong> - Outlines the terms for buying and selling ownership interests, including payment schedules, rights of first refusal, and restrictions on sales.\u003C/li>\n\u003Cli>\u003Cstrong>Buyout Procedures\u003C/strong> - Specifies the steps and timeline for executing the buyout, ensuring a smooth and orderly transfer of ownership.\u003C/li>\n\u003Cli>\u003Cstrong>Dispute Resolution\u003C/strong> - Establishes procedures for resolving disputes related to the agreement, minimizing the impact of disagreements.\u003C/li>\n\u003C/ul>\n\u003Ch5>Supporting Documents for Implementing a Buy-Sell Agreement\u003C/h5>\n\u003Cp>To enhance the effectiveness of a Buy-Sell Agreement, related documents can be incorporated:\u003C/p>\n\u003Cul>\n\u003Cli>\u003Cstrong>Valuation Report\u003C/strong> - Provides an independent assessment of the business's value, ensuring an objective basis for the buyout.\u003C/li>\n\u003Cli>\u003Cstrong>\u003Ca href=\"https://www.business-in-a-box.com/template/shareholders-agreement-D1016/\">Shareholders Agreement\u003C/a>\u003C/strong> - A legally binding document that outlines the rights, responsibilities, and relationships among shareholders in a company. It governs matters like voting rights, dividend distribution, and share transfers, ensuring alignment with the company's goals and protecting shareholders' interests.\u003C/li>\n\u003Cli>\u003Cstrong>\u003Ca href=\"https://www.business-in-a-box.com/template/partnership-agreement-D12551/\">Partnership Agreement\u003C/a>\u003C/strong> - A comprehensive document that sets the framework for the partnership's structure, governance, and operations. It details the partners' rights and obligations, profit-sharing arrangements, and dispute-resolution mechanisms, providing a clear framework for the partnership.\u003C/li>\n\u003Cli>\u003Cstrong>\u003Ca href=\"https://www.business-in-a-box.com/template/general-by-laws-D1008/\">General Bylaws\u003C/a>\u003C/strong> - A foundational document that outlines the fundamental rules and procedures for the governance and management of a business. It defines the roles and responsibilities of the board, the process for holding meetings, voting protocols, and other operational guidelines, ensuring a structured framework for business operations and decision-making.\u003C/li>\n\u003C/ul>\n\u003Ch5>Why Employ a Detailed Template for a Buy-Sell Agreement?\u003C/h5>\n\u003Cp>Utilizing a detailed template for drafting your Buy-Sell Agreement offers significant benefits:\u003C/p>\n\u003Cul>\n\u003Cli>\u003Cstrong>Business Continuity\u003C/strong> - Ensures the business can continue to operate smoothly despite ownership changes.\u003C/li>\n\u003Cli>\u003Cstrong>Fair Valuation and Terms\u003C/strong> - Establishes clear methods for valuing ownership interests and fair terms for buyouts.\u003C/li>\n\u003Cli>\u003Cstrong>Legal Protection\u003C/strong> - Clearly defines the terms and conditions, reducing the risk of disputes and legal issues.\u003C/li>\n\u003Cli>\u003Cstrong>Risk Mitigation\u003C/strong> - Specifies funding mechanisms and buyout procedures, protecting against financial strain.\u003C/li>\n\u003C/ul>\n\u003Cp>A well-structured Buy-Sell Agreement is crucial for protecting the continuity and stability of a business. This essential document not only provides clarity on ownership transitions but also helps manage and mitigate potential risks effectively.\u003C/p>\n\u003Cp>Updated in May 2024\u003C/p>\n",[27,17,20],{"label":28,"url":29},"Templates","/templates/",[31,32,35],{"label":28,"url":29},{"label":33,"url":34},"Legal Agreements","/templates/business-legal-agreements/",{"label":36,"url":37},"Equity & Mergers","/templates/equity-and-mergers/",[39,43,47,51,55,59,63,67,71,75,79,83,87,103,118,134,148,163],{"label":40,"url":41,"thumb":42,"extension":10},"Purchase and Sale Agreement","/template/purchase-and-sale-agreement-D13884","https://templates.business-in-a-box.com/imgs/250px/13884.png",{"label":44,"url":45,"thumb":46,"extension":10},"Asset Sale and Purchase Agreement Film & Television","/template/asset-sale-and-purchase-agreement-film-television-D860","https://templates.business-in-a-box.com/imgs/250px/860.png",{"label":48,"url":49,"thumb":50,"extension":10},"Purchase Agreement","/template/purchase-agreement-D12670","https://templates.business-in-a-box.com/imgs/250px/12670.png",{"label":52,"url":53,"thumb":54,"extension":10},"Sales Agreement","/template/sales-agreement-D13769","https://templates.business-in-a-box.com/imgs/250px/13769.png",{"label":56,"url":57,"thumb":58,"extension":10},"Land Purchase Agreement","/template/land-purchase-agreement-D13424","https://templates.business-in-a-box.com/imgs/250px/13424.png",{"label":60,"url":61,"thumb":62,"extension":10},"Power Purchase Agreement","/template/power-purchase-agreement-D12873","https://templates.business-in-a-box.com/imgs/250px/12873.png",{"label":64,"url":65,"thumb":66,"extension":10},"Real Estate Purchase Agreement","/template/real-estate-purchase-agreement-D13234","https://templates.business-in-a-box.com/imgs/250px/13234.png",{"label":68,"url":69,"thumb":70,"extension":10},"Purchase Agreement Short Version","/template/purchase-agreement-short-version-D12669","https://templates.business-in-a-box.com/imgs/250px/12669.png",{"label":72,"url":73,"thumb":74,"extension":10},"Sale Agreement for International Goods","/template/sale-agreement-for-international-goods-D12553","https://templates.business-in-a-box.com/imgs/250px/12553.png",{"label":76,"url":77,"thumb":78,"extension":10},"Business Transfer Agreement","/template/business-transfer-agreement-D12552","https://templates.business-in-a-box.com/imgs/250px/12552.png",{"label":80,"url":81,"thumb":82,"extension":10},"Commission Split Agreement","/template/commission-split-agreement-D12729","https://templates.business-in-a-box.com/imgs/250px/12729.png",{"label":84,"url":85,"thumb":86,"extension":10},"Profit Sharing Agreement","/template/profit-sharing-agreement-D13753","https://templates.business-in-a-box.com/imgs/250px/13753.png",{"description":88,"descriptionCustom":6,"label":89,"pages":90,"size":9,"extension":10,"preview":91,"thumb":92,"svgFrame":93,"seoMetadata":94,"parents":96,"keywords":95,"url":102},"SHAREHOLDERS AGREEMENT This Shareholders Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST SHAREHOLDER NAME] (the \"First Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND SHAREHOLDER NAME] (the \"Second Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [THIRD SHAREHOLDER NAME] (the \"Third Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WITNESSETH: WHEREAS, the present distribution of shares of the Company is as follows: Name Number of Shares WHEREAS, in order to insure the harmonious and successful management and control of the Company, and to provide for an orderly and fair disposition of shares of common stock of the Company now or hereafter owned by any Shareholder; NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and intending to be legally bound, the parties hereby agree as follows: Definitions and organisation of the company \"Offering Shareholder\" means any Shareholder, or his personal representatives, heirs, administrators, and executors, as the case may be, who pursuant to this Agreement must or does offer all or any of his Shares to the Company or the Continuing Shareholders. \"Continuing Shareholders\" means all Shareholders other than an Offering Shareholder. \"Shares\" means shares of Common Stock of the Company now or hereafter owned by any Shareholder. \"Buyer\" means the Company or those Continuing Shareholders who purchase an Offering Shareholder's Shares pursuant to this Agreement. \"Management Shareholder\" means First Shareholder, Second Shareholder and Third Shareholder. ORGANISATION OF THE COMPANY The affairs of the Company will be managed by a board of [NUMBER] directors unless changed by a unanimous Directors' Resolution. The present directors of the Company are [DIRECTORS' NAMES]. It is agreed that [SHAREHOLDERS' NAMES] shall each be entitled to elect one director to the board of directors of the Company so long as each is a Shareholder. Two (2) directors shall constitute a quorum for the transaction of any business at any meeting of the board of directors. At all meetings of the board of directors, every motion to be carried must receive a majority of the votes cast, subject to the provisions of subparagraphs 2.4 and 2.5. Unless otherwise agreed, board meetings will be held at the head office of the Company. In the event that a nominee to the Board of one of the Shareholders shall fail to vote and act as a director to carry out the provisions of this agreement, then the shareholders agree to exercise their right as shareholders of the Company and in accordance with the Articles of the Company to remove such nominee from the Board and to elect in the place or stead thereof such individual who will use his/her best efforts to carry out the provisions of this agreement but only in the event that the Shareholder whose nominee has been removed fails to appoint a successor within a period of fourteen days from the date such nominee has been removed. The election, appointment and determination of officers and the auditors and advisors of the Company, the defining of their duties and functions and the salaries and remuneration to be paid to them will be a function of the board of directors. Until changed by the board of directors, the Officers of the Company and their annual salaries shall be: Office Held: Director: [NAME] [SALARY] Secretary: [NAME] [SALARY] All direct out-of-pocket expenses will be reimbursed provided these falls within guidelines set out by the Board of Directors from time to time. Until otherwise agreed, each officer of the Company will commit to spending his/her full time on the affairs of the Company. Until changed by the board of directors, the auditors and advisors of the Company shall be: Auditor: Legal Advisors: There shall be kept, in such bank or banks (including trust companies) as may be determined by the board of directors, bank accounts of the Company in which shall be deposited all monies received by the Company in the course of carrying on business from time to time. All payments on account of the Company shall be made by cheques drawn on the bank account and all cheques, drafts or other instruments drawn and made for the purposes of the business of the Company shall be executed by such directors, officers or employees as may from time to time be authorized so to do by the board of directors. Subject to paragraph 2.6, all decisions relating to the management and control of the business of the Company shall be determined by the board of directors of the Company, provided always that the following matters shall be determined by a Special Directors' Resolution: any capital expenditures greater than xxxx; any lease commitments greater than xxxx; the acquisition of any business interests by the Company; the elections of officers of the Company; the payment of any cash dividends or stock dividends to Shareholders of the Company; the issuance of any debt obligations of the Company; the disposal of the whole or any part of the business, undertaking, or assets of the Company outside the normal course of business of the Company the transfer of any shares of the Company; changes or variations in the objects or powers of the Company; the liquidation or winding up of the Company; the approval of any contracts or transactions outside the normal course of business; the execution of any contract involving a consideration greater than xxxx within the normal course of business; the lending of money by the Company; the guarantee by the Company of the debts or obligations of any other person, firm or body corporate; any non-budgeted expenditures greater than xxxx; business plan and/or budgets. The following decisions shall be determined by a Unanimous Directors' Resolution: alterations, variations or changes to the authorized or issued capital of the Company; the salaries and bonuses of officers and directors of the Company; the issue, redemption or purchase of any Shares; and changes in the number of directors of the Company The Shareholders may pledge any of their Shares as security for any borrowings by them provided the pledgee executes an agreement, in writing, providing that the pledgee shall be subject to all of the terms of this Agreement. The board of directors shall meet at least four times during each fiscal year of the Company. Any director can call a meeting provided 10 days notice is given. Notice may be waived. During the first year from the date of this agreement, the board of directors shall meet on a monthly basis. Directors may elect to attend a board meeting by telephone conference call. Each Shareholder shall, for so long as s/he is the owner of shares of the Company devote such of his/her business, time and energy as may be reasonably required to carry on the business of the Company and the Shareholder shall use his/her best efforts, skill and abilities to promote the interests of the Company. Each Shareholder agrees that he/she will not engage, without the consent of the other Shareholders, in a business which is directly competitive to that of the Company. Purchase for Investment","Shareholders Agreement","16","https://templates.business-in-a-box.com/imgs/1000px/shareholders-agreement-D1016.png","https://templates.business-in-a-box.com/imgs/250px/1016.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1016.xml",{"title":95,"description":6},"shareholders agreement",[97,99],{"label":33,"url":98},"business-legal-agreements",{"label":100,"url":101},"Incorporation Agreements","incorporation-agreement","/template/shareholders-agreement-D1016",{"description":104,"descriptionCustom":6,"label":105,"pages":8,"size":9,"extension":10,"preview":106,"thumb":107,"svgFrame":108,"seoMetadata":109,"parents":111,"keywords":116,"url":117},"BUYOUT AGREEMENT This Buyout Agreement (this \"Agreement\") is made and effective this [Date], BETWEEN: [COMPANY NAME], a corporation organized and existing under the laws of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: Each of the individuals listed below (each a \"Shareholder\" and collectively, the \"Shareholders\" The Shareholders desire to promote and protect their mutual interests and the interests of the Company. Therefore, the parties hereby agree as follows: ARTICLE I PARTIES AND PURPOSE PARTIES The Shareholders own all the outstanding shares (the \"Shares\") of the [COMPANY NAME] in the amount outlined below. At this time, each Shareholder's interest in the Company is as follows: __________________ owns _________________ % __________________ owns _________________ % __________________ owns _________________ % While this agreement is in effect, no Shareholder shall have any right to assign, encumber or dispose of his interest in the Company except as provided herein. PURPOSE The purpose of this Agreement is to protect the Corporation's management and control from persons not acceptable to all Shareholders. The others purpose is to provide a ready market in the event of the death, disability or lifetime transfer of Shares by a Shareholder. To this end, the Shareholders have entered into this agreement to: Restrict the transfer or sale of the Shares by the Shareholders; Ensure any sale of the Shares is in the accordance with established procedures; Provide stability and continuity in the management of the Company; Maintain ownership or control of the Company ARTICLE II SALES TRANSFER RESTRICTION ON SHARES No Shareholder (or any party acting on behalf of a Shareholder) may sell or transfer its Shares, whether owned or subsequently acquired, except in accordance with the provisions of this Agreement or with the written consent of the Company and all other Shareholders. Any attempt to sell or transfer Shares (or an interest in Shares) that contravenes the terms of this agreement is null and void and is not binding on or recognized by the Company or the Shareholders. Definition of sale or transfer. The term \"sale or transfer\" includes any sale, pledge, encumbrance, gift, bequest, or other transfer of any Shares, whether or not the transfer would be made for value, or to another Shareholder, or voluntarily or involuntarily or by operation of law, or during his lifetime or upon his death Exception. A sale or transfer of a Shareholder's Shares to a trust that is wholly revocable by that Shareholder and for which that Shareholder is the sole trustee is not a prohibited sale or transfer. However, any subsequent attempted sale or transfer by the trustee of such trust shall be subject to all of the terms of this Agreement with the Shareholder (and not the trust) deemed as the Shareholder of such Shares. Legend on share certificates. Each share certificate whether presently owned or subsequently acquired, shall have the following statement conspicuously printed on its face: \"The transfer, sale, assignment of the Shares represented by this certificate is restricted by a Buyout Agreement among all the Shareholders and the Corporation dated [SPECIFY]. A copy of the Buyout Agreement is available for inspection during normal business hours at the principal office of the Corporation. All the terms and provisions of the Buyout Agreement are incorporated by this reference and made a part of this certificate.\" ARTICLE III VOLUNTARY TRANSFER PERMITTED SALE OR TRANSFER DURING LIFETIME Any Shareholder wishing to sell or transfer its Shares must first notify each of the other Shareholders in writing. Such Shareholder (a \"Seller\") will be deemed to have offered to sell its Shares (the \"Offering Shares\") to other Shareholders. The notice must indicate the name of the party (the \"third party purchaser\") to whom the seller wishes to sell or transfer the offered Shares and the terms of the proposed sale or transfer. First option to other Shareholders. Each of the other Shareholders will have thirty (30) days from the effective date of the notice to choose to purchase the Offered Shares in proportion to their respective ownership of all outstanding Shares (excluding the Offered Shares) or in such other proportion as the other Shareholders may agree. During this 30-day period, the other Shareholders must collectively agree to purchase all or none of the Offered Shares. If the other Shareholders exercise their call option, they must acquire the Offering Shares on the same terms as those set out in the proposed notice of sale or transfer. These conditions will be supplemented, as necessary, by the payment conditions described in Article VI below. Notice of proposed sale. Any Shareholder wishing to sell his/her Shares shall provide a Notice of Proposed Sale. The notice must specify: the name and address of each proposed transferee; the number of Shares or the interest in Shares to be transferred; the price per Share; the terms of the proposed sale, assignment, or transfer. Permitted sale or transfer to third party purchaser. When the other Shareholders do not exercise their right to purchase all the Shares offered within the 30-day period, the seller may then conclude the sale or transfer to the third-party purchaser. However, the sale or transfer must be made on the same terms and conditions as those set out in the notice to other Shareholders. In addition, the third-party buyer must agree in writing to be bound by the terms of this contract before or at the time of the sale or transfer. If the sale or transfer to the third party acquirer is not completed within sixty (60) days of the expiry of the other Shareholder's 30-day option period, then the authorization to sell or transfer under this agreement shall be deemed to have been withdrawn as if no sale or transfer had been considered and no notice given. ARTICLE IV INVOLUNTARY TRANSFER INVOLUNTARY LIFETIME SALE OR TRANSFER Any Shareholder who holds information that could reasonably be expected to result in an involuntary lifetime sale of his or her Shares and any person or entity that has acquired or may acquire an interest in such Shares must promptly notify each of the other Shareholders in writing. The notice must describe the nature and details of the involuntary lifetime sale and must indicate the name of the party (the \"third party transferee\"). The Shareholder will be deemed to have offered to sell its Shares (the \"Offering Shares\") to other Shareholders. The following events shall each constitute an \"Involuntary\" transfer event: the death of a Shareholder; the total mental or physical disability of a Shareholder; the termination of a Shareholder's employment with [COMPANY NAME]; and the bankruptcy or insolvency of a Shareholder. First option to other Shareholders. Each of the other Shareholders will have thirty (30) days from the effective date of this notice to elect to purchase the Offered Shares in proportion to their respective ownership of all outstanding Shares (excluding the Offered Shares) or in such other proportion as the other Shareholders may agree. If the other Shareholders exercise their option to purchase some or all of the offered Shares, they must then acquire these Shares at the purchase price and on the payment, terms described in Articles VI and VII below. Permitted sale or transfer to third party transferee. If the other Shareholders do not validly exercise their option to buy all of the Offered Shares within the 30-day period, then any remaining Offered Shares may be transferred to the third-party transferee. However, the transfer must be made on the same terms and conditions as those contained in the notice to the other Shareholders. Further, the third-party transferee must agree in writing to be bound by the terms of this Agreement before or at the time of the transfer","Buyout Agreement","https://templates.business-in-a-box.com/imgs/1000px/buyout-agreement-D12612.png","https://templates.business-in-a-box.com/imgs/250px/12612.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12612.xml",{"title":110,"description":6},"buyout agreement",[112,114],{"label":18,"url":113},"finance-accounting",{"label":21,"url":115},"buy-sell-shares","partnership buyout agreement","/template/partnership-buyout-agreement-D12612",{"description":119,"descriptionCustom":6,"label":120,"pages":121,"size":122,"extension":10,"preview":123,"thumb":124,"svgFrame":125,"seoMetadata":126,"parents":127,"keywords":132,"url":133},"TABLE OF CONTENTS Pages 1. INTERPRETATION 5 1.1 Definitions 5 1.2 Generally Accepted Accounting Principles 7 1.3 Headings and References 7 1.4 Extended Meanings 7 1.5 Schedules 7 1.6 Currency 7 1.7 Tender 7 1.8 Performance on Holidays 7 1.9 Calculation of Time 7 1.10 Ordinary Course 7 1.11 \"Material\" and \"Materially\" Defined 7 2. PURCHASE AND SALE 7 2.1 Purchase and Sale and Purchase Price 7 2.1.1 Term and Conditions 7 2.1.2 The Purchase Price shall be paid and satisfied as follows: 7 2.2 Adjustments 7 2.2.1. Net Worth Determination 7 2.2.2. Final Determination of Purchase Price 7 2.2.3. Disputes 7 2.3 Closing 7 2.4 Allocation of Purchase Price 7 2.5 General Adjustments 7 2.6 Accounts Receivable 7 2.7 Liabilities Not Assumed 7 2.8 Transfer Taxes 7 2.9 Non-Assignable Contracts 7 2.10 Increase in Rent on Assignment 7 3. REPRESENTATIONS AND WARRANTIES 7 3.1. Representations and Warranties of the Vendor 7 3.1.1 Corporate Matters 7 3.1.2 Title to Purchased Assets 7 3.1.3 No Options 7 3.1.4 The Financial Statements 7 3.1.5 Undisclosed Liabilities 7 3.1.6 Absence of Changes 7 3.1.7 Absence of Unusual Transactions 7 3.1.8 Tax Matters 7 3.1.9 Books and Records 7 3.1.10 Leases, Material Contracts, etc. 7 3.1.11 Accounts Receivable 7 3.1.12 Consents, Approvals, Etc. 7 3.1.13 Absence of Guarantees 7 3.1.14 Restrictions on Business 7 3.1.15 Absence of Conflicting Agreements 7 3.1.16 Compliance with Applicable [YOUR COUNTRY LAW] 7 3.1.17 Employees 7 3.1.18 Collective Agreements 7 3.1.19 Benefit Plans 7 3.1.20 Litigation 7 3.1.21 Insurance 7 3.1.22 Leases 7 3.1.23 Premises 7 3.1.24 No Expropriation 7 3.1.25 Leased Equipment 7 3.1.26 Licenses 7 3.1.27 Intellectual Property Rights 7 3.1.28 Assets 7 3.1.29 Inventories 7 3.1.30 Forward Commitments 7 3.1.31 Copies of Documents 7 3.1.32 Residency 7 3.1.33 Environmental Matters 7 3.1.34 Occupational Health and Safety 7 3.1.35 Workers' Compensation 7 3.1.36 Disclosure 7 3.1.37 Obligations to Customers 7 3.1.38 Retail Outlets 7 3.2. Representations and Warranties of the Purchaser 7 3.2.1 Incorporation 7 3.2.2 Corporate Power and Due Authorization 7 3.2.3 Enforceability of Obligations 7 3.2.4 Absence of Conflicting Agreements 7 3.2.5 Consents and Approvals 7 3.3. Interpretation 7 3.4. Commission 7 3.5. Qualification of Representations and Warranties 7 3.6. Non-Waiver 7 3.7. Survival of Representations and Warranties of the Vendor 7 3.8. Survival of Representations and Warranties of Purchaser 7 3.9. Knowledge of the Vendor 7 4. OTHER COVENANTS OF THE [COMPANY NAME] 7 4.1. Conduct of Business Prior to Closing 7 4.2. Conduct Business in Ordinary Course 7 4.3. Contracts 7 4.4. Continue Insurance 7 4.5. Comply with [YOUR COUNTRY LAW] 7 4.6. Taxes 7 4.7. Employees 7 4.8. Material Changes 7 4.9. Liens 7 4.10. Action by Vendor 7 4.11. Capital Expenditures 7 4.12. [SPECIFY] Claim 7 4.13. Conduct of Business Prior to Closing 7 4.14. Lease Consents and Estoppel Certificates 7 4.15. Consents and Waivers 7 4.16. Access for Investigation 7 4.17. Delivery of Books and Records 7 4.18. Accounts Receivable 7 4.19. Discharge of Obligations 7 4.20. Cooperation 7 4.21. Employees 7 4.21.1. Offer of Employment 7 4.21.2. Employment Process 7 4.21.3. Indemnification for Severance Claims of Non-Hired Employees 7 4.21.4. Claims Re: Employment Prior to Closing 7 4.21.5. Benefit Plans 7 4.21.6. Termination after Time of Closing 7 4.22. Pension Plan for Employees 7 4.23. Actions to Satisfy Closing Conditions 7 4.24. Disclosure 7 4.25. Injunctions 7 4.26. Action by the Vendor 7 4.27. Competition Act 7 4.28. Bulk Sales Legislation and Provincial Legislation 7 4.29. Consignment Goods and Contractual Rights 7 4.30. [DATE] Financial Statements 7 4.31. Purchaser Radius Clauses 7 5. INDEMNIFICATION 7 5.1 Definitions 7 5.2 Indemnification by the Vendor 7 5.3 Indemnification by the Purchaser 7 5.4 Notice of and the Defense of Third Party Claims 7 5.5 Assistance for Third Party Claims 7 5.6 Settlement of Third Party Claims 7 5.7 Direct Claims 7 5.8 Failure to Give Timely Notice 7 5.9 Payment and Interest 7 5.10 Limitation 7 5.11 Rights in Addition 7 5.12 Survival 7 5.13 Subsequent Recovery 7 5.14 Subrogation 7 5.15 Letter of Credit 7 5.16 Notices to Escrow Agent 7 6. CONDITIONS PRECEDENT 7 6.1 Purchaser's Conditions 7 6.2 Accuracy of Representations and Performance of Covenants 7 6.3 Consents to Assignments 7 6.4 No Material Adverse Change 7 6.5 Litigation 7 6.6 Receipt of Closing Documentation 7 6.7 Non-Competition Agreement 7 6.8 Opinion of Counsel for Vendor 7 6.9 Approval of Board of Directors 7 6.10 Management Agreement 7 6.11 Space and Facilities Agreement 7 6.12 Trade Mark License Agreement 7 6.13 Trade Mark Assignment 7 6.14 Cancellation of Certain Agreements 7 6.15 Environmental Audit 7 6.16 Escrow Agreement 7 6.17 Minimum Number of Leases 7 6.18 Vendor's Conditions 7 6.18.1. Accuracy of Representations and Performance of Covenants 7 6.18.2. Litigation 7 6.18.3. Opinion of Counsel for Purchaser 7 6.18.4. Competition Act 7 6.18.5. Minimum Number of Leases 7 6.18.6. Approval of [SPECIFY] Board of Directors 7 6.18.7. Escrow Agreement 7 6.18.8. Management Agreement 7 6.19 Waiver 7 6.20 Failure to Satisfy Conditions 7 6.21 Destruction or Expropriation 7 7. POST CLOSING OPERATIONS 7 7.1 Failure to Obtain Consent to Assignment of Lease 7 7.1.1. If with respect of any Lease described in Schedule [SPECIFY], the Vendor is unable to obtain any necessary consent, substantially in form or forms approved or deemed approved pursuant to subsection 4.1.10, to the assignment thereof to the Purchaser as herein contemplated at the Time of Closing (a \"Non-Assignable Lease\"), then the Non-Assignable Lease shall not be assigned and the Purchaser shall, in accordance with the terms of a management agreement to be entered into by the parties at Closing, manage the Business as it is carried on at the location covered by the Non-Assignable Lease for the account of the Vendor provided that such agreement does not result in a violation of any Applicable [YOUR COUNTRY LAW] or result in the early termination of the Non-Assignable Lease. 7 7.2 Delivery of Space and Facilities Agreement 7 7.3 Release of Vendor from Lease Covenants 7 7.4 No Hiring of Employees 7 7.5 Access for Taxes 7 7.6 Volume Rebates 7 7.7 Remediation of Certain Outstanding Phase I Violations 7 8. GENERAL 7 8.1 Further Assurances 7 8.2 Time of the Essence 7 8.3 Expenses 7 8.4 Benefit of the Agreement 7 8.5 Entire Agreement 7 8.6 Amendments and Waiver 7 8.7 Assignment 7 8.8 Notices 7 8.9 Confidentiality 7 8.10 Governing [YOUR COUNTRY LAW] 7 8.11 Attornment 7 8.12 Counterparts 7 ASSET PURCHASE AGREEMENT This Asset Purchase Agreement (the \"Agreement\") is effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Purchaser\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [COMPANY NAME] (the \"Vendor\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS the Vendor, through its [COMPANY NAME], is in the [SPECIFY] business; AND WHEREAS the Vendor desires to sell and the Purchaser desires to purchase as a going concern the undertaking and substantially all of the assets relating to the business of the Vendor's [COMPANY NAME], upon and subject to the terms and conditions hereinafter set forth; NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the covenants and agreements herein contained the parties hereto agree as follows: INTERPRETATION Definitions In this Agreement, unless something in the subject matter or context is inconsistent therewith:","Asset Purchase Agreement For a Retail Business","71",671,"https://templates.business-in-a-box.com/imgs/1000px/asset-purchase-agreement_for-a-retail-business-D931.png","https://templates.business-in-a-box.com/imgs/250px/931.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#931.xml",{"title":6,"description":6},[128,129],{"label":33,"url":98},{"label":130,"url":131},"Purchase & Sale Agreements","purchase-sale-agreement","asset purchase agreement for a retail business","/template/asset-purchase-agreement-for-a-retail-business-D931",{"description":135,"descriptionCustom":6,"label":136,"pages":137,"size":138,"extension":10,"preview":139,"thumb":140,"svgFrame":141,"seoMetadata":142,"parents":143,"keywords":146,"url":147},"LIMITED LIABILITY COMPANY OPERATING AGREEMENT This Limited Liability Company Operating Agreement is entered into as of the [DATE], BETWEEN: [INDIVIDUAL NAMES] (the \"Managing Members\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [COMPANY NAME] (the \"Non-Managing Members\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] The Managing Members and the Non-Managing Members are referred to herein collectively as the \"Members\". The Members have formed the Company by causing a Certificate of Formation (the \"Certificate\") conforming to the requirements of the [STATE] Revised Limited Liability Company Act (the \"Act\") to be filed in the Office of the Secretary of State for the State of [STATE]. NAME, PURPOSE AND PRINCIPAL OFFICE OF COMPANY Name The name of the Company is [COMPANY NAME], LLC. The affairs of the Company shall be conducted under such name or such other name as the Managing Members may, in their discretion, determine. [COMPANY NAME] hereby grants the Company the right, at no cost, to use the [SPECIFY] name for the term of the Company as set forth in Article [SPECIFY] hereof. Agreement In consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members executing this Agreement hereby agree to the terms and conditions of this Agreement, as it may be amended from time to time. It is the express intention of the Members that this Agreement shall be the sole statement of agreement among them, and, except to the extent a provision of this Agreement expressly incorporates matters by express reference, this Agreement shall govern even when inconsistent with or different from the provisions of the Act or any other provision of law. Purpose; Powers Purpose. The primary purpose of the Company is to act as the general partner of [COMPANY NAME] (the \"Fund\"). Powers. Subject to all of the terms and provisions hereof, the Company shall have all powers necessary, suitable or convenient for the accomplishment of the purpose of the Company, including, without limitation, the following: to purchase, sell, invest and trade in securities of every kind, including, without limitation, capital stock, limited partnership interests, bonds, notes, debentures, securities convertible into other securities, trust receipts and other obligations, instruments or evidences of indebtedness, as well as in rights, warrants and options to purchase securities; to make and perform all contracts and engage in all activities and transactions necessary or advisable to [SPECIFY] out the purposes of the Company, including, without limitation, the purchase, sale, transfer, pledge and exercise of all rights, privileges and incidents of ownership or possession with respect to any Company asset or liability; the borrowing or lending of money and the securing of payment of any Company obligation by hypothecation or pledge of, or grant of a security interest in, Company assets; and the guarantee of or becoming surety for the debts of others; and otherwise to have all the powers available to it as a limited liability company under the Act. Registered Office and Agent The initial address of the Company registered office in [STATE] is, and its initial agent at such address for service of process is Incorporating Services Limited. The Managing Members may change the registered office and agent for service of process as they from time to time may determine. Principal Office The principal office of the Company shall initially be located at [ADDRESS]. The Managing Members may change the location of the principal office of the Company at any time. Definitions Additional Members. This term shall have the meaning ascribed to it in Paragraph 3.2. Affiliate. With reference to any person, any other person controlling, controlled by or under direct or indirect common control with such person. Agreement. This Operating Agreement of [COMPANY NAME], a [STATE] limited liability company. Assignee. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Bankruptcy. A person or entity shall be deemed bankrupt if: any proceeding is commenced against such person or entity as debtor for any relief under bankruptcy or insolvency laws, or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions and such proceeding is not dismissed within [NUMBER] days after such proceeding has commenced, or such person or entity commences any proceeding for relief under bankruptcy or insolvency laws or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions. Book Value. This term shall have the meaning ascribed to it in Paragraph 6.2(a). Capital Account. This term shall have the meaning ascribed to it in Paragraph 6.2(b). Capital Commitment. This term shall have the meaning ascribed to it in Paragraph 5.1. Capital Contribution. This term shall have the meaning ascribed to it in Paragraph 5.1(b). [SPECIFY]. The Company [PERCENTAGE] carried interest in the income of the Fund. Certificate. The Certificate of Formation of [COMPANY NAME], a [STATE] limited liability company. Code. [SPECIFY YOUR COUNTRY INTERNAL REVENUE ACT/CODE/LAW], as amended from time to time (and any corresponding provisions of succeeding law). Defaulting Member. This term shall have the meaning ascribed to it in Paragraph 5.4(a). Fiscal Quarter. This term shall have the meaning ascribed to it in Paragraph 6.2(c). Fiscal Year. This term shall have the meaning ascribed to it in Paragraph 6.2(d). Management Fee. The management fee receivable by the Company from the Fund. Net Income or Net Loss. This term shall have the meaning ascribed to it in Paragraph 6.2(e). Percentage Interest. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Sale or Exchange. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Securities Act. [YOUR COUNTRY ACT/CODE/LAW] as amended from time to time. Securities. Securities of every kind and nature and rights and options with respect thereto, including stock, notes, bonds, debentures, evidences of indebtedness and other business interests of every type, including interests in partnerships, joint ventures, proprietorships and other business entities. TMP. This term shall have the meaning ascribed to it in Paragraph 13.16. Termination Date. This term shall have the meaning ascribed to it in Paragraph 2.1. Treasury Regulations. The Income Regulations promulgated under the Code, as such Regulations may be amended from time to time (including corresponding provisions of succeeding Regulations). TERM AND TERMINATION OF THE COMPANY Term The term of the Company shall continue until [NUMBER] year after the dissolution of the Fund unless sooner terminated as provided in Paragraph 2.2 or by operation of law or extended as provided in Paragraph 2.3. The last day of the term of the Company, as such may be extended as provided herein, is referred to herein as the \"Termination Date.\" Termination The Company shall terminate prior to the end of the period specified in Paragraph 2.1 at the election of the Managing Members. The Managing Members shall deliver notice of such termination to the Non-Managing Members. Extension of Term The term of the Company may be extended by the Managing Members. The Managing Members shall provide notice of any such extension to the Non-Managing Members. INITIAL MEMBERS; CHANGES IN MEMBERSHIP Name and Address The persons listed on Exhibit A are hereby admitted as Members of the Company","LLC Operating Agreement","21",207,"https://templates.business-in-a-box.com/imgs/1000px/llc-operating-agreement-D5209.png","https://templates.business-in-a-box.com/imgs/250px/5209.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#5209.xml",{"title":6,"description":6},[144,145],{"label":33,"url":98},{"label":100,"url":101},"llc operating agreement","/template/llc-operating-agreement-D5209",{"description":149,"descriptionCustom":6,"label":150,"pages":151,"size":9,"extension":10,"preview":152,"thumb":153,"svgFrame":154,"seoMetadata":155,"parents":157,"keywords":156,"url":162},"NON-DISCLOSURE AGREEMENT (NDA) This Non-Disclosure Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Disclosing Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [RECEIVING PARTY NAME] (the \"Receiving Party\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS, Receiving Party has been or will be engaged in the performance of work on [DESCRIBE]; and in connection therewith will be given access to certain confidential and proprietary information; and WHEREAS, Receiving Party and Disclosing Party wish to evidence by this Agreement the manner in which said confidential and proprietary material will be treated. NOW, THEREFORE, it is agreed as follows: NON-DISCLOSURE OF CONFIDENTIAL INFORMATION Both Parties understand and agree that each Party may have access to the confidential information of the other party. For the purposes of this Agreement, \"Confidential Information\" means proprietary and confidential information about the Disclosing Party's (or it's suppliers') business or activities. Such information includes all business, financial, technical, and other information marked or designated by such Party as \"confidential\" or \"proprietary.\" Confidential Information also includes information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. For the purposes of this Agreement, Confidential Information does not include: Information that is currently in the public domain or that enters the public domain after the signing of this Agreement. Information a Party lawfully receives from a third Party without restriction on disclosure and without breach of a non-disclosure obligation. Information that the Receiving Party knew prior to receiving any Confidential Information from the Disclosing Party. Information that the Receiving Party independently develops without reliance on any Confidential Information from the Disclosing Party. Each Party agrees that it will not disclose to any third Party or use any Confidential Information disclosed to it by the other Party except when expressly permitted in writing by the other Party. Each Party also agrees that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control. TERM The term of this Agreement is [number] of [years/months] from the date of execution by both Parties. TITLE The Receiving Party agrees that all Confidential Information furnished by the Disclosing Party shall remain the sole property of the Disclosing Party. DISCLAIMER","Non Disclosure Agreement Nda","3","https://templates.business-in-a-box.com/imgs/1000px/non-disclosure-agreement-nda-D12692.png","https://templates.business-in-a-box.com/imgs/250px/12692.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12692.xml",{"title":156,"description":6},"non disclosure agreement nda",[158,159],{"label":33,"url":98},{"label":160,"url":161},"Confidentiality Agreements","confidentiality-agreement","/template/non-disclosure-agreement-nda-D12692",{"description":164,"descriptionCustom":6,"label":165,"pages":8,"size":9,"extension":10,"preview":166,"thumb":167,"svgFrame":168,"seoMetadata":169,"parents":171,"keywords":170,"url":176},"PARTNERSHIP AGREEMENT This Partnership Agreement (\"Agreement\") is made and effective this [Date], BETWEEN: [YOUR COMPANY NAME] (the \"First Partner\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [SECOND PARTNER NAME] (the \"Second Partner\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] RECITALS Partners desire to join together for the pursuit of common business goals. Partners have considered various forms of joint business enterprises for their business activities. Partners desire to enter into a partnership agreement as the most advantageous business form for their mutual purposes. The parties hereto agree to form a limited partnership (the \"Partnership\") under [LAW, CODE OR ACT]. In consideration of the mutual promises contained in this agreement, partners agree as follows: NAME AND DOMICILE The name of the partnership shall be [name]. The principal place of business shall be at [address], [city], [state/province], unless relocated by consent of the partners. Purposes Subject to the limitations set forth in this Agreement, the purposes of the Partnership are to engage in the business of [DESCRIBE ACTIVITIES]; and to conduct other activities as may be necessary or incidental to or desirable in connection with the foregoing. DURATION OF AGREEMENT The term of this agreement shall be for [number] years, commencing on [date], and terminating on [date], unless sooner terminated by mutual consent of the parties or by operation of the provisions of this agreement. CLASSIFICATION AND PERFORMANCE BY PARTNERS Partners shall be classified as active partners, advisory partners, or estate partners. An active partner may voluntarily become an advisory partner, may be required to become one irrespective of age, and shall automatically become one after attaining the age of [age] years, and in each case shall continue as such for [number] years unless the partner sooner withdraws or dies. If an active partner dies, the partner's estate will become an estate partner for [number] years. If an advisory partner dies within [Number] years of having become an advisory partner, the partner will become an estate partner for the balance of the [number]-year period. Only active partners shall have any vote in any partnership matter. At the time of the taking effect of this partnership agreement, all the partners shall be active partners except [name] and [name], who shall be advisory partners. An active partner, after attaining the age of [age] years, or prior to that age if the [executive committee or as the case may be] with the approval of [two-thirds or as the case may be] of all the other active partners determines that the reason for the change in status is bad health, may become an advisory partner at the end of any calendar month on giving [number] calendar months' prior notice in writing of the partner's intention to do so. The notice shall be deemed to be sufficient if sent by registered mail addressed to the partnership at its principal office at [address], [city], [state/province] not less than [number] calendar months prior to the date when the change is to become effective. Any active partner may at any age be required to become an advisory partner at any time if the [executive committee or as the case may be] with the approval of [two-thirds or as the case may be] of the other active partners shall decide that the change is for any reason in the best interests of the partnership, provided notice of the decision shall be given in writing to the partner. The notice shall be signed by the [chairman or as the case may be] of the [executive committee or as the case may be] or, in the event of his or her being unable to sign at the time, by another member of the [executive committee or as the case may be]. The notice shall be served personally on the partner required to change his or her status or mailed by registered mail to the partner's last known address. Change of the partner's status shall become effective as of the date specified in the notice. Every active partner shall automatically and without further act become an advisory partner at the end of the fiscal year in which the partner's birthday occurs. In the event that an active partner becomes an advisory partner or dies, the partner or the partner's estate shall be entitled to the following payments at the following times: [describe] Each active partner shall apply all of the partner's experience, training, and ability in discharging the partner's assigned functions in the partnership and in the performance of all work that may be necessary or advantageous to further the business interests of the partnership. CONTRIBUTION Each partner shall contribute [amount] on or before [date] to be used by the partnership to establish its capital position. Any additional contribution required of partners shall only be determined and established in accordance with Article Nineteen. MANAGEMENT OF THE PARTNERSHIP The Partnership shall be managed by [SPECIFY]. Subject to the limitations specifically contained in this Agreement, [PARTY MANAGING THE PARTNERSHIP] shall have the full, exclusive and absolute right, power and authority to manage and control the Partnership and the property, assets and business thereof. [PARTY MANAGING THE PARTNERSHIP] shall have all of the rights, powers and authority conferred by law or under other provisions of this Agreement. Without limiting the generality of the foregoing, such powers include the right on behalf of the Partnership, in [PARTY MANAGING THE PARTNERSHIP]' sole discretion, to: Acquire, purchase, renovate, improve, and own any property or assets necessary or appropriate or in the best interests of the business of the Partnership, and to acquire options for the purchase of any such property; Borrow money, issue evidences of indebtedness in connection therewith, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any indebtedness or obligation of the Partnership, and secure such indebtedness by mortgage, deed of trust, pledge or other lien on Partnership assets; Sue on, defend or compromise any and all claims or liabilities in favor of or against the Partnership and to submit any or all such claims or liabilities to arbitration; File applications, communicate and otherwise deal with any and all governmental agencies having jurisdiction over, or in any way affecting, the Partnership's assets or any part thereof or any other aspect of the Partnership business; Retain services of any kind or nature in connection with the Partnership business, and to pay therefore such remuneration deem reasonable and proper; and Perform any and all other acts deem necessary or appropriate to the Partnership business. TRANSFER OF PARNERSHIP INTERESTS Restrictions on Transfer None of the Partners shall sell, assign, transfer, mortgage, encumber, or otherwise dispose of the whole or part of that Partner's interest in the Partnership, and no purchaser or other transferee shall have any rights in the Partnership as an assignee or otherwise with respect to all or any part of that Partnership interest attempted to be sold, assigned, transferred, mortgaged, encumbered, or otherwise disposed of, unless and to the extent that the remaining Partner(s) have given consent to such sale, assignment, transfer, mortgage, or encumbrance, but only if the transferee forthwith assumes and agrees to be bound by the provisions of this Agreement and to become a Partner for all purposes hereof, in which event, such transferee shall become a substituted partner under this Agreement.","Partnership Agreement","https://templates.business-in-a-box.com/imgs/1000px/partnership-agreement-D12551.png","https://templates.business-in-a-box.com/imgs/250px/12551.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12551.xml",{"title":170,"description":6},"partnership agreement",[172,173],{"label":33,"url":98},{"label":174,"url":175},"Partnership Agreements","partnership-agreement","/template/partnership-agreement-D12551",true,{"seo":179,"reviewer":191,"legal_disclaimer":177,"quick_facts":195,"at_a_glance":198,"personas":202,"variants":227,"glossary":252,"clauses":289,"how_to_fill":340,"common_mistakes":376,"faqs":401,"industries":429,"comparisons":454,"diy_vs_lawyer":467,"jurisdictions":480,"related_template_ids_curated":501,"schema":511,"classification":512},{"meta_title":180,"meta_description":181,"primary_keyword":182,"secondary_keywords":183},"Buy Sell Agreement Template | BIB","Free buy sell agreement template for business owners. Covers ownership transfer, valuation, triggering events, and funding.","buy sell agreement template",[184,185,186,187,188,189,190],"buy sell agreement template word","buy sell agreement template free","business buy sell agreement","buy sell agreement for small business","business succession agreement template","shareholder buy sell agreement","partnership buy sell agreement",{"name":192,"credential":193,"reviewed_date":194},"Bruno Goulet","CEO, Business in a Box","2026-05-02",{"difficulty":196,"legal_review_recommended":177,"signature_required":177,"notarization_required":197},"advanced",false,{"what_it_is":199,"when_you_need_it":200,"whats_inside":201},"A Buy Sell Agreement is a legally binding contract among business co-owners that governs how an owner's interest must be valued and transferred when a triggering event occurs — such as death, disability, retirement, divorce, or a voluntary sale. This free Word download gives you a structured, attorney-ready starting point you can edit online and export as PDF to share with co-owners, legal counsel, and your life insurance provider.\n","Use it when forming a partnership, LLC, or closely held corporation with two or more owners, or when an existing multi-owner business lacks a formal succession plan. It is particularly urgent before any owner faces a health event, a divorce proceeding, or an unsolicited outside offer to purchase a stake.\n","Triggering events and obligations to buy or sell, valuation methodology, funding mechanism (life insurance, installment payments, or sinking fund), right of first refusal, transfer restrictions, deadlock resolution, and governing law. The agreement ties directly to your shareholders or operating agreement to form a complete ownership-management framework.\n",[203,207,211,215,219,223],{"title":204,"use_case":205,"icon_asset_id":206},"Business co-founders","Establishing exit terms before a dispute or unexpected event forces the issue","persona-startup-founder",{"title":208,"use_case":209,"icon_asset_id":210},"Small business partners","Protecting the business from an unwanted outside buyer inheriting a partner's stake","persona-small-business-owner",{"title":212,"use_case":213,"icon_asset_id":214},"Family business owners","Preventing ownership from passing to in-laws or heirs who are not active in the business","persona-family-business-owner",{"title":216,"use_case":217,"icon_asset_id":218},"LLC members","Supplementing an operating agreement with a clear buyout formula and funding plan","persona-llc-member",{"title":220,"use_case":221,"icon_asset_id":222},"Corporate shareholders","Restricting share transfers and setting a redemption price for closely held stock","persona-shareholder",{"title":224,"use_case":225,"icon_asset_id":226},"Business succession planners","Coordinating ownership transfer with life insurance policies and estate plans","persona-estate-planner",[228,232,235,238,241,245,249],{"situation":229,"recommended_template":230,"slug":231},"Two or more owners want the business entity itself to buy out the departing owner","Entity-Purchase (Redemption) Buy Sell Agreement","buy-sell-agreement-D12611",{"situation":233,"recommended_template":234,"slug":231},"Each owner wants to personally buy the departing owner's interest directly","Cross-Purchase Buy Sell Agreement",{"situation":236,"recommended_template":237,"slug":231},"A hybrid structure allowing either the entity or remaining owners to buy, in that order","Wait-and-See Buy Sell Agreement",{"situation":239,"recommended_template":240,"slug":231},"Two owners are deadlocked and need a mechanism to resolve the stalemate","Shotgun Clause Buy Sell Agreement",{"situation":242,"recommended_template":243,"slug":244},"Partners in a general or limited partnership need buyout terms","Partnership Buyout Agreement","partnership-buyout-agreement-D12612",{"situation":246,"recommended_template":247,"slug":248},"A sole owner is selling the entire business to a third party","Business Purchase Agreement","asset-purchase-agreement-for-a-retail-business-D931",{"situation":250,"recommended_template":89,"slug":251},"Owners need a shareholder-level agreement for a corporation","shareholders-agreement-D1016",[253,256,259,262,265,268,271,274,277,280,283,286],{"term":254,"definition":255},"Triggering Event","A predefined circumstance — death, disability, retirement, divorce, bankruptcy, or voluntary sale — that activates the buy sell agreement's transfer obligations.",{"term":257,"definition":258},"Redemption Agreement","A type of buy sell arrangement in which the business entity itself purchases the departing owner's interest, rather than the remaining individual owners.",{"term":260,"definition":261},"Cross-Purchase Agreement","A buy sell structure where surviving or remaining owners personally buy the departing owner's interest directly, often funded by life insurance policies on each other.",{"term":263,"definition":264},"Right of First Refusal","A contractual right giving existing owners the first opportunity to purchase a departing owner's interest before it can be sold to an outside third party.",{"term":266,"definition":267},"Valuation Method","The formula or process specified in the agreement for determining the fair market value of an owner's interest at the time of a triggering event — common methods include fixed price, book value, capitalized earnings, and independent appraisal.",{"term":269,"definition":270},"Funding Mechanism","The financial arrangement — typically life insurance, a sinking fund, or installment payments — that ensures the purchasing party has the liquidity to complete the buyout.",{"term":272,"definition":273},"Sinking Fund","A reserve of cash set aside periodically by the business or its owners specifically to fund future buyout obligations without relying on external financing.",{"term":275,"definition":276},"Disability Buyout Insurance","A specialized insurance policy that pays a lump sum or periodic benefit to fund the purchase of a disabled owner's interest under the terms of the buy sell agreement.",{"term":278,"definition":279},"Book Value","The net asset value of the business as reported on its balance sheet — total assets minus total liabilities — used as one method of valuing an owner's interest.",{"term":281,"definition":282},"Shotgun Clause","A deadlock-resolution mechanism in which one owner names a price to buy out the other; the other owner must either sell at that price or buy the proposing owner out at the same price.",{"term":284,"definition":285},"Installment Purchase","A buyout structure in which the purchase price is paid in scheduled installments over a defined period, rather than as a single lump sum at closing.",{"term":287,"definition":288},"Fair Market Value","The price at which an interest would change hands between a willing buyer and a willing seller, neither under compulsion, both with reasonable knowledge of the relevant facts.",[290,295,300,305,310,315,320,325,330,335],{"name":291,"plain_english":292,"sample_language":293,"common_mistake":294},"Parties and recitals","Identifies every owner by legal name and ownership percentage and states the purpose of the agreement — to provide an orderly, pre-agreed mechanism for ownership transitions.","This Buy Sell Agreement ('Agreement') is entered into as of [DATE] by and among [OWNER 1 NAME], holding a [X]% interest, [OWNER 2 NAME], holding a [Y]% interest, and [COMPANY LEGAL NAME], a [STATE] [ENTITY TYPE] (collectively, the 'Parties').","Listing ownership percentages that don't add up to 100% or that conflict with the operating agreement or cap table — creating ambiguity that invalidates the transfer mechanics.",{"name":296,"plain_english":297,"sample_language":298,"common_mistake":299},"Triggering events","Defines the specific circumstances that obligate or entitle an owner or the business to initiate a buyout, such as death, permanent disability, voluntary transfer, retirement, divorce, or bankruptcy.","A 'Triggering Event' shall mean any of the following: (a) the death of an Owner; (b) the Permanent Disability of an Owner, as defined in Section [X]; (c) a voluntary offer to transfer an Owner's Interest to a third party; (d) the filing of a bankruptcy petition by or against an Owner; (e) the entry of a divorce decree affecting an Owner's Interest.","Omitting divorce as a triggering event. Without it, a divorcing owner's spouse may be awarded a portion of the business interest by a family court, giving an outsider a seat at the table.",{"name":301,"plain_english":302,"sample_language":303,"common_mistake":304},"Valuation methodology","Specifies exactly how the business interest will be priced when a triggering event occurs — whether by fixed price updated annually, formula (e.g., capitalized EBITDA), book value, or independent appraisal.","The purchase price for an Owner's Interest shall be determined by [CHOSEN METHOD]: (a) Fixed Price: $[AMOUNT] per [UNIT/SHARE], subject to annual review and update by the Owners each January 1; OR (b) Independent Appraisal: a certified business valuator mutually agreed upon by the Parties within [30] days of the Triggering Event.","Setting a fixed price at signing and never updating it. After two or three years, a stale fixed price dramatically undervalues or overvalues the departing owner's interest, leading to litigation.",{"name":306,"plain_english":307,"sample_language":308,"common_mistake":309},"Purchase obligation and option","States whether the purchase is mandatory (both parties must complete it) or optional (one party has the right but not the obligation to buy or sell), and which party — the entity or the remaining owners — has priority to purchase.","Upon a Triggering Event, the Company shall have a first right to purchase the Departing Owner's Interest at the Agreed Price within [60] days of notice. If the Company does not exercise this right, the Remaining Owners shall have a secondary right to purchase pro rata within an additional [30] days.","Failing to specify whether the purchase obligation is mandatory or optional. An optional buy sell gives the buyer a free option — they buy when convenient but are not compelled to when the seller most needs liquidity.",{"name":311,"plain_english":312,"sample_language":313,"common_mistake":314},"Right of first refusal","Requires an owner who receives a bona fide outside offer to first offer the interest to the remaining owners and/or the company at the same price and terms before accepting the outside offer.","Before accepting any offer to transfer all or any portion of an Owner's Interest to a third party, the transferring Owner ('Offeror') shall provide written notice to the Company and remaining Owners of the proposed terms. The Company and remaining Owners shall have [30] days to elect to purchase the Interest on the same terms.","Not specifying what happens if the remaining owners can only collectively match part of the offer. Define whether partial exercise is permitted or whether the right must be exercised in full.",{"name":316,"plain_english":317,"sample_language":318,"common_mistake":319},"Funding mechanism","Describes how the buyer will finance the purchase — typically life insurance proceeds for a death trigger, disability buyout insurance for a disability trigger, and installment payments or a sinking fund for voluntary transfers.","To fund the purchase obligation upon the death of an Owner, each Owner / the Company [select one] shall maintain a life insurance policy on each other Owner in an amount no less than [X]% of such Owner's Interest value as last determined. Proceeds received shall be applied directly to the purchase price.","Specifying life insurance as the funding source without confirming the policy amount is updated whenever the valuation is updated. An underinsured policy leaves a surviving owner short of the funds needed to complete the buyout.",{"name":321,"plain_english":322,"sample_language":323,"common_mistake":324},"Transfer restrictions","Prohibits any voluntary or involuntary transfer of an ownership interest except as expressly permitted by this agreement, preventing ownership from passing to heirs, creditors, or outsiders without consent.","No Owner shall transfer, assign, pledge, hypothecate, or otherwise encumber all or any portion of their Interest except in strict compliance with this Agreement. Any purported transfer in violation of this Section shall be null and void and of no force or effect.","Using transfer restriction language that conflicts with the entity's operating agreement or shareholders agreement. Conflicting documents create enforcement gaps — courts may apply whichever provision is more favorable to the transferring owner.",{"name":326,"plain_english":327,"sample_language":328,"common_mistake":329},"Deadlock and dispute resolution","Provides a mechanism for resolving owner disputes that cannot otherwise be resolved, including valuation disagreements, through mediation, arbitration, or the shotgun clause.","If the Parties cannot agree on the value of the Interest within [30] days of a Triggering Event, each Party shall appoint an independent certified business valuator. If the two valuators disagree by more than [10]%, the two valuators shall jointly appoint a third, whose determination shall be final and binding.","No dispute resolution clause at all — when owners disagree on valuation and there is no agreed process, the only option is litigation, which can cost more than the buyout itself.",{"name":331,"plain_english":332,"sample_language":333,"common_mistake":334},"Termination and amendment","States the conditions under which the agreement terminates — typically when one owner buys out all others, the company is sold, or the company dissolves — and the process required to amend the agreement.","This Agreement shall terminate upon: (a) the written consent of all Parties; (b) the completion of a transfer leaving only one Owner; or (c) the dissolution or winding up of the Company. Amendments require the written consent of all Owners then party to this Agreement.","No amendment clause, which means a stale valuation method or outdated triggering-event list cannot be updated without a new agreement — leaving owners bound by terms that no longer reflect the business reality.",{"name":336,"plain_english":337,"sample_language":338,"common_mistake":339},"Governing law and entire agreement","Specifies the jurisdiction whose laws govern the agreement and confirms that this document — together with any referenced schedules — supersedes all prior understandings between the owners on ownership transfer.","This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE], without regard to its conflict-of-law principles. This Agreement constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings.","Choosing a governing law with no connection to where the business operates or where the owners reside — courts in the owners' home jurisdiction may disregard the choice-of-law clause entirely.",[341,346,351,356,361,366,371],{"step":342,"title":343,"description":344,"tip":345},1,"List all current owners with legal names and exact ownership percentages","Enter each owner's full legal name and their precise ownership percentage as it appears in the operating agreement, shareholders agreement, or cap table. Confirm the percentages sum to 100%.","Cross-reference the state registry filing and the most recent equity schedule before signing — discrepancies between documents give courts a reason to question which controls.",{"step":347,"title":348,"description":349,"tip":350},2,"Define every triggering event specific to your situation","Work through the standard list — death, permanent disability, voluntary transfer, retirement, divorce, bankruptcy, and loss of professional license — and decide which ones apply to your business. Add any industry-specific events.","Retirement is often the most-argued triggering event. Define it precisely: age threshold, years of service, or written notice of intent — not just 'when an owner decides to retire.'",{"step":352,"title":353,"description":354,"tip":355},3,"Select and document the valuation methodology","Choose one primary method (fixed price, formula-based, or independent appraisal) and specify the fallback if owners cannot agree. Document the current agreed value in a Schedule A and commit to reviewing it annually.","For businesses with volatile earnings, a trailing-twelve-month EBITDA multiple is more defensible than book value, which can swing dramatically based on depreciation timing.",{"step":357,"title":358,"description":359,"tip":360},4,"Decide on entity purchase, cross-purchase, or wait-and-see structure","Determine whether the company or the individual owners (or both, in sequence) will have the obligation or option to purchase the departing owner's interest. This choice has significant tax and insurance implications — consult a tax advisor before finalizing.","For businesses with three or more owners, a cross-purchase structure requires each owner to hold a life insurance policy on every other owner — the number of policies grows exponentially. An entity-purchase or wait-and-see structure is typically simpler to administer.",{"step":362,"title":363,"description":364,"tip":365},5,"Specify the funding mechanism for each triggering event","Match each triggering event to a funding source: life insurance for death, disability buyout insurance for disability, sinking fund or installment plan for retirement or voluntary sale. State the minimum insurance face value and who is responsible for maintaining each policy.","Review existing life insurance policies before drafting this clause — you may be able to repurpose policies already in force rather than purchasing new ones.",{"step":367,"title":368,"description":369,"tip":370},6,"Draft the right of first refusal and transfer restriction clauses","Set the notice period (typically 30–60 days), specify whether partial exercise is permitted, and confirm the transfer restriction language does not conflict with your operating or shareholders agreement.","If your operating agreement already contains a right of first refusal, this agreement should supersede it explicitly — otherwise courts may apply both and reach contradictory results.",{"step":372,"title":373,"description":374,"tip":375},7,"Execute before any triggering event is on the horizon","All current owners must sign the agreement. Each owner should receive an executed original or a fully executed PDF. Store a copy with the business records, with each owner's estate planner, and with the insurance broker.","Sign the agreement at or before the time the business is formed, or at the time a new owner joins. Post-event timing raises consideration issues and may make the agreement unenforceable.",[377,381,385,389,393,397],{"mistake":378,"why_it_matters":379,"fix":380},"Using a stale fixed valuation price","A price set at formation can diverge dramatically from actual business value within 18–24 months. Surviving owners end up overpaying or the departing owner's estate receives far less than fair value, triggering disputes.","Schedule an annual review meeting to update the agreed valuation in Schedule A. If owners miss the review, require that an independent appraisal applies automatically.",{"mistake":382,"why_it_matters":383,"fix":384},"Omitting divorce as a triggering event","Without a divorce trigger, a family court can award part of an owner's business interest to their former spouse, putting a stranger on the ownership register with rights to distributions and information.","Include divorce explicitly as a triggering event and give the company and remaining owners the right to purchase the interest attributed to the divorcing owner's spouse at fair market value.",{"mistake":386,"why_it_matters":387,"fix":388},"Mismatched insurance face value and current business value","If a $500,000 life insurance policy funds a buyout for a business now worth $2 million, the surviving owners cannot complete the purchase — the estate receives partial payment and may force a fire sale or litigation.","Tie the required insurance face value to the most recently agreed valuation and require owners to increase coverage within 90 days of any valuation update.",{"mistake":390,"why_it_matters":391,"fix":392},"Conflicting transfer restrictions with the operating or shareholders agreement","Two documents with different transfer restriction mechanics give a departing owner the ability to argue for whichever version is more favorable to them, undermining both agreements.","Include an explicit supersession clause and review the operating or shareholders agreement at the same time the buy sell agreement is drafted, amending inconsistencies before signing.",{"mistake":394,"why_it_matters":395,"fix":396},"No defined dispute resolution process for valuation disagreements","When owners cannot agree on price and there is no agreed process, the only resolution is litigation — which can cost $50,000–$200,000 in legal fees and often destroys the business in the process.","Specify a two-appraiser process with a third tiebreaker, or commit to a specific arbitration body (e.g., AAA), and require that the process be initiated within 30 days of a triggering event.",{"mistake":398,"why_it_matters":399,"fix":400},"Signing the agreement after a triggering event has already occurred","An agreement executed after an owner is already terminally ill, in divorce proceedings, or contemplating a sale will be challenged as lacking fresh consideration and may be voided by a court.","Execute the buy sell agreement when the business is formed or when a new owner joins, while all parties are in a neutral position — before any specific event is anticipated.",[402,405,408,411,414,417,420,423,426],{"question":403,"answer":404},"What is a buy sell agreement?","A buy sell agreement is a legally binding contract among co-owners of a business that governs what happens to an owner's interest when a triggering event occurs — such as death, disability, retirement, divorce, bankruptcy, or a voluntary sale. It pre-agrees the price, the buyer, and the funding mechanism so that ownership transitions happen smoothly rather than through litigation or forced sales. It is sometimes called a buyout agreement or a business succession agreement.\n",{"question":406,"answer":407},"When should a buy sell agreement be put in place?","The best time to execute a buy sell agreement is when the business is first formed and all co-owners are in a neutral position. The second-best time is when a new co-owner joins the business. Waiting until a triggering event is on the horizon — an illness, a divorce, or a retirement — makes the agreement far harder to negotiate and easier for a court to challenge on consideration grounds.\n",{"question":409,"answer":410},"What are the three main types of buy sell agreements?","The three primary structures are: (1) Entity-purchase (or redemption), where the business itself buys the departing owner's interest; (2) Cross-purchase, where the remaining individual owners buy the interest directly from the departing owner; and (3) Wait-and-see, a hybrid that gives the entity the first right to purchase, with remaining owners exercising a secondary right if the entity declines. The right structure depends on tax objectives, the number of owners, and how the buyout will be funded.\n",{"question":412,"answer":413},"How is the purchase price determined in a buy sell agreement?","Common valuation methods include a fixed price updated annually by the owners, a formula based on a multiple of EBITDA or book value, or an independent appraisal triggered at the time of the event. Fixed-price approaches are administratively simple but require disciplined annual updates to remain accurate. Formula approaches are self-updating but can produce counterintuitive results in unusual years. Independent appraisal is the most accurate but takes time and costs $5,000–$25,000 per event.\n",{"question":415,"answer":416},"How is a buy sell agreement typically funded?","For a death trigger, life insurance is the most common and cost-effective funding source — the policy proceeds are paid tax-free in most cases and are immediately available to complete the buyout. Disability buyout insurance funds the disability trigger. Voluntary transfers and retirement buyouts are often funded through installment payments or a sinking fund accumulated over time. Some agreements combine multiple mechanisms depending on the trigger.\n",{"question":418,"answer":419},"Does a buy sell agreement need to be updated?","Yes. At minimum, the valuation should be reviewed annually, and the agreement itself should be reviewed whenever the business adds or loses an owner, changes its structure, or undergoes a significant change in value. The funding mechanism — particularly life insurance face values — must be updated whenever the agreed valuation increases. A buy sell agreement that is more than two to three years out of date is likely to produce a purchase price that no longer reflects reality.\n",{"question":421,"answer":422},"Is a buy sell agreement the same as a shareholders agreement?","They overlap but are not the same. A shareholders agreement is a broader governance document covering voting rights, dividend policy, board composition, and management decisions. A buy sell agreement focuses specifically on ownership transfer — triggering events, valuation, purchase obligations, and funding. Many closely held businesses use both, with the buy sell agreement either standing alone or incorporated as a transfer-restriction schedule within the shareholders agreement.\n",{"question":424,"answer":425},"Can a buy sell agreement be used in an LLC?","Yes. Buy sell provisions can be incorporated into an LLC's operating agreement or executed as a standalone buy sell agreement among the members. The mechanics are the same as for corporations — triggering events, valuation, purchase rights, and funding — but the terminology refers to membership interests rather than shares. State LLC statutes vary on transfer restriction enforceability, so legal review is recommended.\n",{"question":427,"answer":428},"What happens if there is no buy sell agreement when an owner dies?","Without a buy sell agreement, a deceased owner's interest passes to their estate and ultimately to their heirs under the will or intestacy laws. The heirs become co-owners of the business with all associated rights — including the right to demand distributions, inspect books, and in some cases, block decisions. Surviving owners who want to buy out the estate must negotiate price and terms under duress, often leading to protracted disputes and, in the worst case, a court-ordered forced sale of the entire business.\n",[430,434,438,442,446,450],{"industry":431,"icon_asset_id":432,"specifics":433},"Professional Services","industry-professional-services","Buyouts must address the loss of a licensed professional (law, accounting, medicine) as a triggering event, and valuations often rely on client book or recurring fee revenue multiples rather than hard assets.",{"industry":435,"icon_asset_id":436,"specifics":437},"Manufacturing","industry-manufacturing","Asset-heavy balance sheets mean book value can be a meaningful valuation input, but equipment depreciation schedules can distort it significantly — independent appraisal is often required for large facilities.",{"industry":439,"icon_asset_id":440,"specifics":441},"Technology / SaaS","industry-saas","Valuation is typically based on ARR multiples or discounted cash flow; IP assignment and non-compete clauses in the buy sell agreement are critical given that founder departures can directly affect software ownership and competitive positioning.",{"industry":443,"icon_asset_id":444,"specifics":445},"Family Business","industry-family-business","Divorce and death triggers are the primary concerns; the agreement must interact carefully with estate plans, family trusts, and any shareholder loans to family members to prevent unintended ownership fragmentation.",{"industry":447,"icon_asset_id":448,"specifics":449},"Healthcare","industry-healthtech","Loss of medical licensure or DEA registration is a common additional triggering event; patient-base valuation requires specialized healthcare appraisers familiar with payer mix and practice goodwill methodology.",{"industry":451,"icon_asset_id":452,"specifics":453},"Retail / Hospitality","industry-retail","Lease assignment rights and location-specific goodwill are key valuation components; a departing owner's death or disability during peak season can create immediate operational and liquidity pressure that the funding mechanism must address.",[455,458,460,463],{"vs":89,"vs_template_id":456,"summary":457},"shareholders-agreement-D12627","A shareholders agreement is a broad governance document covering voting rights, board composition, dividend policy, and management authority. A buy sell agreement is narrower — it addresses only ownership transfer mechanics when a triggering event occurs. Many closely held businesses need both: the shareholders agreement runs the business day-to-day while the buy sell agreement governs what happens when an owner exits.",{"vs":243,"vs_template_id":244,"summary":459},"A partnership buyout agreement documents the specific terms of a single, already-agreed purchase of one partner's interest and is used at the time of an actual transaction. A buy sell agreement is a forward-looking document that pre-agrees the rules for future hypothetical exits — it governs the process, not the transaction itself. Use the buyout agreement to close the deal the buy sell agreement was designed to govern.",{"vs":247,"vs_template_id":461,"summary":462},"business-purchase-agreement-D165","A business purchase agreement transfers 100% of a business to a third-party buyer and covers the full transaction — assets or shares, representations and warranties, closing conditions, and indemnification. A buy sell agreement applies only to transfers among existing co-owners and does not address third-party acquisitions. When a buy sell triggers a full sale, a business purchase agreement documents the resulting transaction.",{"vs":464,"vs_template_id":465,"summary":466},"Operating Agreement","llc-operating-agreement-D12625","An LLC operating agreement governs the ongoing management and financial rights of members — capital contributions, distributions, voting, and manager authority. Transfer restrictions and buyout provisions in an operating agreement are often brief and general. A standalone buy sell agreement provides the detailed valuation methodology, funding mechanism, and triggering-event specificity that a standard operating agreement's transfer section typically lacks.",{"use_template":468,"template_plus_review":472,"custom_drafted":476},{"best_for":469,"cost":470,"time":471},"Two-owner businesses with straightforward equal splits, simple valuation, and no estate planning complexity","Free","1–2 hours",{"best_for":473,"cost":474,"time":475},"Three or more owners, businesses with significant value, or situations involving life insurance coordination and annual updates","$500–$1,500","3–7 days",{"best_for":477,"cost":478,"time":479},"Complex ownership structures, multi-entity businesses, high-value enterprises, or agreements requiring integration with estate plans and trust structures","$2,500–$10,000+","2–6 weeks",[481,486,491,496],{"code":482,"name":483,"flag_asset_id":484,"note":485},"us","United States","flag-us","Buy sell agreements are governed by state contract and corporate law, which varies significantly. The tax treatment of entity-purchase versus cross-purchase structures differs under the IRC — cross-purchase arrangements receive a step-up in basis for the purchasing owners while redemption agreements do not. California imposes restrictions on transfer restrictions for corporations. The FLP (Family Limited Partnership) structure is commonly paired with buy sell agreements for estate planning in high-net-worth situations.",{"code":487,"name":488,"flag_asset_id":489,"note":490},"ca","Canada","flag-ca","In Canada, buy sell agreements must align with applicable provincial corporate or partnership statutes — the Canada Business Corporations Act or provincial equivalents govern share transfer restrictions for corporations. Life insurance funding of buy sell agreements has specific tax treatment under the Income Tax Act, including the capital dividend account (CDA) rules that can allow tax-free distribution of insurance proceeds to surviving shareholders. Quebec civil law introduces distinct enforceability considerations for restrictive clauses.",{"code":492,"name":493,"flag_asset_id":494,"note":495},"uk","United Kingdom","flag-uk","UK buy sell arrangements, often embedded in shareholders agreements, must comply with the Companies Act 2006, including restrictions on a company purchasing its own shares (treasury shares rules apply). Life insurance policies used to fund buyouts should be structured as relevant life policies or business protection policies for tax efficiency. Stamp duty of 0.5% applies to share transfers above £1,000 and must be accounted for in the funding mechanism.",{"code":497,"name":498,"flag_asset_id":499,"note":500},"eu","European Union","flag-eu","EU member states each have distinct corporate law frameworks governing share transfer restrictions — German GmbH law, French SAS rules, and Dutch BV regulations all treat right-of-first-refusal and forced transfer clauses differently. GDPR considerations arise when the agreement references personal data of owners or beneficiaries. Valuation disputes that cross member-state borders may require specifying EU arbitration rules explicitly. Insurance funding structures vary in tax treatment by country and should be reviewed locally.",[251,244,248,502,503,504,505,506,507,508,509,510],"llc-operating-agreement-D5209","non-disclosure-agreement-nda-D12692","partnership-agreement-D12551","stock-purchase-agreement-D349","letter-of-intent-for-purchase-of-computer-equipment-D1148","asset-purchase-agreement-D928","business-report-D12762","business-succession-plan-D13910","shareholder-loan-agreement-D13239",{"emit_how_to":177,"emit_defined_term":177},{"primary_folder":98,"secondary_folder":513,"document_type":514,"industry":515,"business_stage":516,"tags":517,"confidence":523},"equity-and-mergers","agreement","general","all-stages",[518,519,520,521,522],"equity","buy-sell-agreement","co-owner-transition","ownership-transfer","business-continuity",0.95,"\u003Ch2>What is a Buy Sell Agreement?\u003C/h2>\n\u003Cp>A \u003Cstrong>Buy Sell Agreement\u003C/strong> is a legally binding contract among the co-owners of a business that pre-establishes the rules for how an owner's interest must be valued and transferred when a defined triggering event occurs — such as death, permanent disability, retirement, divorce, bankruptcy, or a voluntary offer to sell to an outside party. Rather than leaving these transitions to negotiation under pressure or resolution through litigation, a buy sell agreement locks in the methodology, the buyer, the timeline, and the funding mechanism while all parties are in a neutral position. It functions simultaneously as a succession plan, a transfer restriction mechanism, and a liquidity tool for the departing owner or their estate.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>Without a buy sell agreement, any triggering event — a co-founder's sudden death, a partner's divorce, or an unsolicited acquisition offer — forces surviving owners to negotiate ownership and valuation terms under the worst possible conditions: time pressure, grief, legal adversaries, and no pre-agreed framework. A deceased owner's heirs inherit a seat at the table. A divorcing owner's spouse may be awarded a portion of the business by a family court with no understanding of the company's operations. A departing owner who can't agree on value with remaining owners has no choice but to file for judicial dissolution. Each of these scenarios can destroy an otherwise healthy business. A properly executed buy sell agreement, in place before any of these events is anticipated, closes every one of these gaps — and this template gives you the structured starting point to draft, review with counsel, and execute before the need arises.\u003C/p>\n",1778773471162]