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Partnership Buy / Sell Funding When a partner in a business dies, the disposition of his or her business interest often creates many problems for his heirs as well as the remaining partners. There are many important issues that have to be dealt with. Who will purchase the shares of the deceased? What is a fair price for his shares in the business? Where will the funds come from?These problems are easily resolved if a buy-sell agreement has been established. A buy-sell agreement provides that:
This example illustrates the need of a buy-sell agreement. Acme Metric Hammers is a partnership with three owners; George, Howard, and Stanley. If George was to pass away, his shares in the company would be passed on to his son Harry. Harry does not have experience in running the business and both Howard and Stanley dislike the idea of sharing the company with him. It is reasonable to assume that if one of the other two partners passed away, George would feel the same way about their heirs. Setting up a buy-sell agreement will ensure the remaining partners attain full control of the company. It also assures the deceased that his heirs will receive a fair price for his shares. Where will the funds come from? All that remains are the funds to purchase the deceased shares. Having to suddenly liquidate a large part of the business to pay off the heirs of the deceased can be very damaging to the company. In the case where a partner passes away, the death benefit will help pay for his shares in the company. With no money to lay out and with very minimal risk, Life Insurance is the most effective and cost-efficient strategy to help partners plan for the future. Please contact us today for your no-obligation consultation. We look forward to helping you and your family. "Until recently I had no personal insurance whatsoever, and no idea on how to get the right coverage. Before I met Mark, I didn't even know what I didn't know. Mark sat me down and took the time to put... " Read more Tyler Lang Vice President HDL Capital Corporation www.hdlcapital.com "On the frontline of healthcare, I witness what happens everyday to families struck by serious illness or death. It had been a long time since my own planning was comprehensively reviewed so I called M... " Read more Dr. Richard A. Seeley Chief of Staff, St. Peter's Hospital Hamilton, ON "As the founder of Back Clinics of Canada I often meet patients who travel here from all over the world seeking expert advice and quality care in our clinic. I am especially grateful that Mark Halper... " Read more Dr. Ron Nusbaum Back Clinics of Canada www.backclinicsofcanada.ca | ||||||
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