Buy & Sell Agreement – 2 Parties, Death & Disability

BUY & SELL AGREEMENT

 2 Parties, Death & Disability

Summary A Buy and Sell Agreement may be used to protect the shares of a company or member’s interest in a CC in the event of the death or disability of a shareholder or member. It is intended to be used where there are two equity-holders. A Buy and Sell Agreement provides for the remaining equity-holder to buy the deceased or disabled party’s shares.

Do you only want to cover death, but not disability? We have the Buy & Sell Agreement for you.

Why do I need a Buy and Sell Agreement? The agreement sets out the procedure to be followed if a shareholder or member dies or becomes disabled. It provides for the remaining equity-holder to buy the equity, and also refers to any buy and sell life policies that have been taken out to cover the purchase price. Standard Buy and Sell Agreements are usually associated with life insurance policies. But you do not necessarily have to have life insurance policies in place to implement a Buy and Sell arrangement.

Who should use this template Buy and Sell Agreement? Shareholders in private companies and members in CCs should have a frank discussion with each other on what would happen to the shares / member’s interest should something happen to one of them, ie. the death or disability of a shareholder or member. A written Agreement can be used if they decide that the one would buy the other out should one of them die or become disabled.

What does the agreement say? The standard terms consist of: Definitions; Introduction; Policies; Valuation; Purchase Price; Delivery of Documents; Cession of Policies; Disputes; General.

What does this agreement look like? The document can be printed onto six pages.

What do you need to do to use the document?

• Read the sample Buy and Sell document to ensure that it suits your requirements. Make any changes as required.
• Complete Annexure A by including the policy details of any buy and sell insurance policies that may have been taken out.
• Ensure both equity-holders sign the Agreement with each getting a copy of the final, signed agreement.

Also viewed: Contingent Liability Agreement

The Online Agreements Shop cc and its members, staff, legal advisers, partners and consultants, agents and any person associated therewith cannot be held liable for any loss or damage that is incurred or may be incurred by any person as a direct or indirect result of the use of this website or any document or information contained on or obtained from this website, nor as a result of anything that is contained in or left out of any document.