At Brien Leibinger Lawyers we’re passionate about helping plan future pathways for individuals, as well as businesses. Our experienced commercial lawyers can help with the creation of effective Buy Sell Agreements for your business. This will help put the appropriate arrangements in place, for if and when your business and its partnerships come to an end.
Sometimes called a “Business Will”, a Buy Sell Agreement is a contract between business owners that provides what is to happen if one of them involuntarily and unexpectedly departs the business.
Usually the agreement gives each owner the option of buying the interest in the business of an owner who dies, suffers a critical illness or major trauma or who becomes totally and permanently disabled. If one of those trigger events occurs to an owner, then the other owners can use their option to acquire the business interest (or a designated portion of that interest) of the departing owner. The funding to pay for the transfer of the departing owner’s business interest is usually provided by insurance proceeds from policies that are taken out by each owner for that purpose.
However, where the insurance proceeds have not been increased in step with the value of the business then the continuing owners may be required to cover the shortfall themselves by instalments payable over an agreed period or some other method.
While the preferred position will always be to fund the acquisition of a departing owner’s interest via insurance policies, it may not be possible for owners to obtain insurance cover in all cases (e.g. an insurer may decline to cover an owner who has a serious medical condition or illness or who has suffered a serious injury).
Plan Now For Peace of Mind.
Whatever the situation, the consequences of a failure to plan and not having appropriate arrangements in place can be disastrous. The situation is potentially fraught with emotion and there’s a probability that disputes and unwanted distractions will impact on the operation of the business. What can be guaranteed is that everyone involved will be unhappy with the ultimate outcome.
Not having a formal Buy Sell Agreement and appropriate insurance funding in place when an owner dies or can no longer work in the business, can lead to disputes between the surviving owner(s) and the departing owner and their family about:
Whenever two or more people own a business, it is essential to have a proper Buy Sell Agreement in place to ensure a seamless and dispute free transfer of an owner’s business interest if one owner has to leave the business involuntarily. Brien Leibinger Lawyers can help. We’re experienced at preparing Buy Sell Agreements tailored to the individual requirements of businesses. Contact us today on (07) 4225 5420 or firstname.lastname@example.org
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Brien has acted for us when we have subdivided property, sold and purchased farming properties, purchased SunWater water allocation, created or changed trust deeds, provided us with estate planning advice and written our Wills. We have always found his work to be of a very high standard. Brien’s correspondence is fast and efficient. He is extremely thorough and takes great pride in his work. We have always found his advice to accurate and insightful.
Peter & Chelley Howe - Rock Ridge Farming Pty Ltd
We have appointed Brien Leibinger Lawyers to undertake the legal affairs related to the purchase of several commercial and private properties in Cairns. In addition, Brien has attended to private family matters including the formulation of Wills for the family. I have found Brien Leibinger Lawyers very efficient, cost effective and diligent in the various assignments. Apart from the legal issues, I have found Brien to be a good friend and his advice from time to time has been very valuable. I would not hesitate to recommend Brien Leibinger Lawyers to anyone requiring a good lawyer in Cairns.
Sir Peter Barter. GCL, OBE, Kt - Melanesian Tourist Services Ltd
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