The greatest segment of wealth in the United States is in family-owned businesses. Family businesses make up over 80 percent of all business enterprises. Even 35 percent of Fortune 500 companies are family controlled. Clearly, family businesses can create wealth.
By 2017, it is estimated that over 40 percent of family business owners will retire. This creates a significant transition of ownership. Only half of those expecting to retire have created a plan for succession.
A Buy/Sell agreement (buyout agreement) is a legally binding agreement between co-owners of a business that governs the situation if a co-owner passes away or chooses to leave the business. Too often, the buy/sell agreement that is set in place to protect the business owners actually becomes a liability due to the owner’s lack of understanding and their responsibilities.
The Buy/Sell agreement may have special clauses that list: who can buy, what events will cause a buyout, or what price will be paid for the partner or shareholders interest in the business.
At Finley Davis Financial Group, we help review the Buy/Sell agreement to ensure your financial future, as well as your business, making a successful transition after the sale.
If you own a business and would like assistance with business Buy/Sell agreements, please give us a call at 541-342-2224 to schedule an appointment.