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Home Definitions

What is a Buy-sell Agreement/Buy-sell Agreements? Definition or Meaning

Posted by Bizversity

As you know, nothing lasts forever, neither do shareholders’ interest in retaining shares in a particular business or their financial ability to do so. Also, remember, they are mortals and once they need to sell their shares the legal agreement called ‘buy-sell’ comes into the picture to enable the business to buy back shares in such or other previously agreed events.

For example…

Let’s say you and your three yoga class mates decide to open up a dessert bar, you know to live a balanced life and all. Having equal say and verbal agreements are not enough. You need a buy-sell agreement to outline what happens to the first friend’s share if she dies. Or decides she doesn’t like ice cream as much as she thought she does and wants out. It’s good to outline such events, what prices will be paid etc. in such an agreement.

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