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How does a buy-sell agreement help protect a business owner’s interests?
Posted in Estate Planning

In this month’s Louisville Business First Legal Forum Column, BGD partner John S. Lueken discusses the legal necessity of buy-sell agreements to protect the interests of business owners. Read his advice below:

How does a buy-sell agreement help protect a business owner’s interests? 

Similar to the purchase of insurance or the writing of a will, the best time to put a buy-sell agreement in place is before it’s ever needed. A properly drafted buy-sell agreement provides for the orderly transfer of a business interest upon the occurrence of a triggering event such as death, disability or retirement. Operating without such an agreement can often result in lawsuits, costly delays and possibly the collapse of business. 

In addition to triggering events, buy-sell agreements should always contain calculation of the purchase price and its manner of funding, payment terms and the type of arrangement, e.g., cross purchase, redemption or hybrid method. 

While it’s exciting to pursue your passion in developing a business with others, ignoring what could happen in the event the partners ever decide to go their separate ways is foolhardy. It is much better to hit these issues head on at the outset when everyone is getting along well. 

To learn more about John S. Lueken and his practice, please visit his profile. 

To view the latest Legal Forum Column, please click here. 

  • Partner

    John is Chair of the firm's Estate Planning Department. He also leads the firm's Senior Partner Committee, and is a member of the firm's Finance Committee. John, a former Certified Public Accountant, began his career in the tax ...



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