Contract Lawyer Montana  

There are many reasons that a Montana business owner needs to have a buy-sell agreement in place, no matter whether the business takes the form of a corporation, limited liability company, or partnership. The reality is that death, divorce, disability, and retirement can all come about unexpectedly, and you need a means of allowing the business to continue to operate smoothly. A buy-sell agreement can achieve this goal by explicitly stating the terms of the transfer of ownership of the business under certain circumstances. The following is a brief overview. For more detailed information regarding your situation, a contract lawyer in Montana can help.

What is a buy-sell agreement and why does my business need one?

When a sudden event causes a disruption in the ownership of the business, a buy-sell agreement will dictate the terms of a transfer of ownership, so as to ensure that the business continues operating at its current level of profit. It is common for a buy-sell agreement to make the share of a departing or deceased owner available to the other shareholders for purchase. In essence, the remaining owners will then buy out the other owner, whether he or she has voluntarily or involuntarily left the business. The buy-sell agreement also typically lists the different types of events that trigger the provisions of the agreement. These events often include death, disability, retirement, and divorce. Another advantage to the buy-sell agreement is that it can eliminate the issues raised by one owner’s divorce, particularly if the owners do not wish to have the spouse or ex-spouse of a former owner involved in the business. The overarching goal of the buy-sell agreement is to provide for a clear transition of business ownership so as to avoid the hostility and expensive legal disputes that often can arise during the division of business interests.

How does a buy-sell agreement address the value of the business?

As a Montana contract lawyer can explain, one of the most difficult aspects of a buy-sell agreement is determining how to properly value an ownership interest in the business in the event that one of the terms of the agreement goes into effect. This provision helps minimize disputes between the business owners, particularly if the split has become acrimonious in some way. There are a number of different ways to value the business. First, the owners could meet annually in order to place an accurate value on the business. Other common ways to place a value on a business are to set a price for shares based on a certain predetermined formula, use the value of the business according to its records as of a certain date, or to get an appraisal of the business, perhaps updating the appraisal every few years.

Call Our Office Today

At Silverman Law Office, PLLC, we know how to handle all types of issues related to your business, including buy-sell agreements, business formation, contracts, and employment law issues. No matter what the issue may be with respect to your Illinois business, we have the knowledge and experience that you need to work toward a successful resolution of the matter. Contact us today and set up an immediate consultation with a Montana contract lawyer and see what we can do to help you with your business-related legal issues.