A purchase-sale contract is a contract concluded by the owners of a family business to define the rights and obligations of the owners when certain “triggering” events occur. These events can be any life scenario that would lead homeowners to want to have predefined and legally enforceable means to deal with the situation. These can be relationship events such as marriage or divorce; unpredictable life events, such as the incapacity or misconduct of a homeowner; or outgoing events such as retirement or death. Often, entrepreneurial families expect their family ties and shared wealth to support them as owner partners in difficult times, and in the best case, they will. Strong family relationships, a common history, common values and goals and a number of other ingredients contribute to an effective and strong family business. But predictable and unexpected life events are likely and can have a negative impact on homeowners. Families should not jeopardize any of their most sacred and important assets by failing to make the right legal agreements to protect it. An effective buy-sell contract answers the following questions: A buy-sell contract is a legally binding contract that defines the parameters under which shares can be bought or sold in a company. A buy-sell agreement is an attempt to avoid potential chaos if one of an organization`s partners wants or needs to leave the business. Questions are asked about the identity of the company, as well as the type of business it is and where it is created.
Then each of the names of the owners is entered. The most important thing is that this document questions different situations and how the ownership shares of the company are managed in these situations, such as. B the involuntary transfer of ownership shares, the dismissal of an employee owner, the death of an owner, the retirement of an owner or the fact that an owner wishes to sell or voluntarily transfer ownership units during his lifetime. A buy-sell or buyout contract is a legal contract that exists, which happens when a co-owner or partner dies in proportion to a company or wants/has to leave the company. This document can be used when a company, through its owners, wishes to enter into a formal written agreement on how and whether the owners can sell their ownership shares. It is likely that this document will be kept both by the company itself and by the individual owners in order to have a record of what has been agreed. By the agreement, the owners agree to restrict their right to the free sale or transfer of their shareholding in the capital in favour of an orderly and foreseeable transfer of ownership of the company. If, in any of the circumstances mentioned above, you have a buy-sell agreement, your business could be subject to division by sale….