I have known the proprietor of East Coast Financial for over 20 years and from the day I met him, to shortly after when he managed my money, I knew he and his organization is one I could trust.
A buy-sell agreement is a legal contract providing terms for the disposition of business ownership interests if a specified ‘triggering event’ occurs. The most common triggering events detailed in buy-sell agreements are an owner’s death, disability, retirement or premature withdrawal from the business.
– Robert Leaman | Retired | Compressed Gas Solutions
- Sinking Funds: In this method of funding buy-sell arrangements, business profits are held back and used to cover the cost of a buy-sell arrangement. However, should an owner become deceased following the implementation of this strategy, then the business cannot accrue the necessary funding to fulfill its redemption obligation.
- Installment Purchase: Buy-sell arrangements can also be funded by installment purchases. Bear in mind that this strategy has a major flaw due to its tendency to inhibit cash flow, which could cause dramatic effects if the interest purchased belongs to a majority owner. No cash flow could mean no business.
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