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Buy-Sell Agreement

Almost every business with more than one owner should have a buy-sell agreement. A buy-sell agreement is a binding contract between you and your co-owners that controls when an owner can sell his interest, who can buy an owner's interest and what price will be paid for that interest. Usually a buy-sell agreement also gives the company and its owners an opportunity to buy out an owner who has stopped working for the company or has died. By so doing it eliminates the possibility that active owners will be forced to share profits with an inactive owner or an unsuitable new owner.

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Buy-Sell Agreement (Guidance Notes)