Buy Sell Agreement
The buy and sell agreement is also known as buyout agreement, or business will. Buy and sell agreement are often used by sole proprietorships, partnerships, and closed corporations in an attempt to smooth transition in ownership when each partner dies, retires or decide to exit the business.
In order to ensure that funds are available, partners in a business commonly purchase life insurance policies on the other partners. In the event of death, the proceeds from the policy will be used towards the purchase of the deceased’s business interest.