Owning an interest in a closely held business is much different than owning stock in a corporation that is traded on a public market like the New York Stock Exchange. The peculiarities of owning an interest in a closely held business are typically dealt with in a Buy-Sell Agreement. Some of the general business objectives accomplished with a Buy-Sell Agreement include:
- providing for an orderly transfer of the interest in the business upon the death, retirement or disability of a shareholder;
- establishing a fair price for the interest in the business;
- providing a method for funding the sale of the interest in the business;
- continuing the business and reducing the risk of dissolution and loss of value;
- providing a framework for transfers and, particularly in a family business, preventing outsiders from acquiring an interest in the business.
Our business lawyers have significant practical experience in advising owners of closely held businesses on the appropriate legal structure for Buy-Sell Agreements. We are also familiar with the income tax and estate tax consequences associated with the particular legal structure of a Buy-Sell Agreement.
