Buy And Sell Agreement

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Dictionary Says

Definition of 'Buy And Sell Agreement'

An approach used by sole proprietorships, partnerships and closed corporations to divide the business share or interest of a proprietor, partner, or shareholder. The owner of the business interest being considered has to be disabled, deceased, retired or expressed interest in selling. The buy and sell agreement requires that the business share is sold according to a predetermined formula to the company or the remaining members of the business. Before the interest of a deceased partner can be sold to the company or remaining partners, the deceased's estate must agree to sell.

Investopedia Says

Investopedia explains 'Buy And Sell Agreement'

In order to ensure the availability of funds in the event of a partner's death, most parties will purchase life insurance policies on the other partners. In the event of a death, the proceeds from the life insurance policy are used to purchase a portion of the deceased's business interest.  It is important to note that when a sole proprietor dies, since he/she has no partners, a key employee is the buyer or successor.



Search results for

'Buy And Sell Agreement'

  • How can a futures trader exit a position prior to expiration?

    http://www.investopedia.com/ask/answers/06/exitingfuturesposition.asp
    A futures contract is an agreement to buy or sell a commodity at a pre-determined
    price and quantity at a future date in time. While this is similar. ...

  • A cash buyout agreement has been announced for a stock I own, but ...

    http://www.investopedia.com/ask/answers/08/buy-out-price.asp
    ... A cash buyout agreement has been announced for a stock I own ... if it means that they
    will be able to sell it to ... until the cost of the commission to buy the stock ...

  • Options and Futures: You Already Trade Them - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0210/Options-and-Futures-You-Already-Trade-Them.aspx
    ... A futures contract represents an agreement to buy or sell a financial product
    or commodity at a given price at a specified day in the future. ...

  • How To Create A Business Succession Plan

    http://www.investopedia.com/articles/pf/07/succession_planning.asp
    ... Partners who do not need or want a successor may simply sell their portion
    of the business to their partners in a buy-sell agreement. ...

  • When Your Money Is Worth The Most - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0811/When-Your-Money-Is-Worth-The-Most.aspx
    ... highest yields on bonds or bank certificates of deposit (CD), or skillfully and
    advantageously negotiating either a buy or sell agreement with a private party. ...

  • Analyzing A REX Agreement

    http://www.investopedia.com/articles/mortgages-real-estate/08/analyzing-rex-agreement.asp
    ... Given the high probability of prices dropping during the next five years, homeowners
    who do not plan to sell should benefit from a REX agreement. ...

  • Setting Vs. Getting: What Is A Price-Taker?

    http://www.investopedia.com/articles/trading/121001.asp
    ... If we buy a security one day for $30 and sell it a ... The "market's inefficiencies"
    are based on an unspoken agreement between investors and traders because ...

  • Derivatives 101

    http://www.investopedia.com/articles/optioninvestor/10/derivatives-101.asp
    ... One party agrees to sell a good and another party agrees to buy it at a specific
    price on a specific date. Before this agreement occurred in an organized market ...

  • Rent To Own; Own To Rent

    http://www.investopedia.com/articles/mortgages-real-estate/09/real-estate-purchase-options.asp
    ... Investors thinking of using these options to buy or sell properties should understand
    these risks before entering into a real estate option agreement. ...

  • Futures Fundamentals: How The Market Works | Investopedia

    http://www.investopedia.com/university/futures/futures2.asp
    ... So, a futures contract is an agreement between two parties ... of the short position
    (agreeing to sell) while the ... would be the holder of the long (agreeing to buy). ...

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