Risk & Business Magazine Cooke Insurance Group Fall 2016 | Page 31

BUY-SELL AGREEMENTS

What If a Member of Your
Business Partner’s Family
Became a Majority Shareholder?

Don’t Get Stuck in Bed With Your Business Partner’s Spouse

Buy-Sell Agreements

I

magine the following situation:
You are one of the shareholders in a
successful private corporation. In the
event one of your business partners
passes away suddenly and there isn’t
a firm plan in place as to what happens to
his or her shares in the company, what will
happen next? What are your choices at that
point?
1.

2.

You can buy out the shares, but where
does the money come from? How do
you determine the fair value of the
business to avoid long and sometimes
expensive arguments over the
valuation process?

There should be a shareholder
agreement in place w