Buy-Sell Agreements are an essential part of any start-up to protect owner/investors from costly future problems. A Buy-Sell Agreement is a legally binding contract stipulating the terms and conditions under which any owner can sell or transfer an interest in a business. Traditionally, Buy-Sell Agreements provide guidelines for the future of the business in the event of departure, death, divorce and disability.
Buy-Sell Agreements when starting a business with friends and family are as important as contracts when starting a company with any business associates. Trust in family members is not sufficient to protect your interests in all financial transactions. A Scottsdale Arizona business startup attorney can negotiate the terms of a Buy-Sell Agreement and draft a legally binding contract. Contact Lotzar Law Firm, P.C. today for legal advice on creating an effective Buy-Sell Agreement.
Buy-Sell Agreements When Starting a Business With Friends and Family
You need Buy-Sell Agreements with all co-investors and co-owners in a business because:
- Owners could divorce. Arizona is a community property state and an interest in a business established during the marriage may be divisible by the court. A Buy-Sell Agreement ensures you are not forced to work with a friend or family member’s ex-spouse.
- Disagreements could arise and owners could leave. Many successful businesses have been undone by family feuds. Uncertainty about the future of an organization resulting from the departure of an owner can drive clients and potential customers away and undermine the effectiveness of operations.
- Takeover attempts could occur. Co-owners could be approached with an offer of sale. Without a Buy-Sell Agreement, you have little control over the transfer of your co-owner’s shares.
- An owners departure may become necessary. Owners may be forced to leave due to disability or to pursue other business ventures. A Buy-Sell Agreement can establish guidelines for valuing the departing owner’s interests in the company.
Lotzar Law Firm, P.C. can review your organization’s structure and foundational documents to advise you on the necessity of a Buy-Sell Agreement. Ownership shares in privately held small companies are among the most complex types of investments to liquidate or transfer. Buy-Sell Agreements make it simpler for owners to divest themselves of their interests in the organization.
Lotzar Law Firm, P.C. will:
- Determine necessary provisions to include in a Buy-Sell Agreement to protect your future financial interests and the ongoing success of your organization.
- Negotiate the terms and conditions of all contract provisions with co-owners and advise you on your rights and obligations under the contract.
- Draft a legally enforceable contract that meets all standards of contract formation in the state of Arizona.
- Assist in the development of a valuation formula for departing co-owners of your business organization.
- Represent you in disputes regarding the interpretation of a Buy-Sell Agreement.
Smart business owners take every step possible to plan for future contingencies. Buy-Sell Agreements when starting a business with friends and family are essential to protect your investment in the organization. Call today to schedule a consultation with Lotzar law Firm, P.C. to get started on your Agreement.
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