Buy-Sell Agreements

What is a Buy-Sell Agreement?
A buy-sell agreement is a legal agreement between shareholders
or business owners that provides for a smooth transfer of ownership should a partner become disabled or critically ill, retire or die. Since businesses are constantly changing, we recommend that buy-sell agreements be reviewed annually.

When entering into a buy/sell agreement, owners or shareholders should ask: Who will inherit or buy the business interest? What price will be paid for the business interest? Where will the money come from to buy the co-owner's business interest?

Benefits of an insured Buy-Sell Agreement:

• The business’ working capital remains untouched.
• The owner's business has a guaranteed market at a fair price.
• The deceased or disabled owner’s family is provided with cash.
• Employees, creditors, suppliers and customers are ensured that the death, disability or retirement of a business owner
  will not disrupt daily business operations.

Key Person Insurance

The most valuable asset of any successful business is its key people, whose unique talents make a significant contribution to
the bottom line. Who are key people? You, people with unique relationships with valued customers, people with specialized technical talents and people responsible for major projects.
What impacts could a key person’ death or disablement have
on your business?

• Projects could stop
• Job momentum could be lost
• Job security for other employees could be affected
• Customers could be lost
• The business could have difficulties in continuing
• The business could have trouble maintaining its good reputation
• The business could lose sales and profit
• The business’ line of credit be affected
• There could be costs associated with recruiting, hiring
  and training a replacement

Benefits of Key Person Insurance:

• It is the most economical way of providing cash
• Proceeds are tax-free
• Money is delivered at the exact time it is needed
• The business’ future is secure

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