Buy & Sell Agreement – 3 or more Parties, Death only

BUY & SELL AGREEMENT

3 or more parties

Death only

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 of a member or shareholder. It is intended to be used where there are three or more shareholders / members. A Buy and Sell Agreement provides for the remaining equity-holders to buy the deceased party’s shares / member’s interest.

Do you want to cover death and disability? We have a Buy & Sell Agreement for you.

Why do I need a Buy and Sell Agreement? A Buy and Sell Agreement sets out the procedure to be followed if a shareholder / member dies. The Agreement provides for the remaining equity-holders to buy the equity, and it 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 a Buy and Sell Agreement? Shareholders in companies and a CC’s members should have a frank discussion with each other about what will happen to the shares / member’s interest should something happen to one of them, ie. death of a member or shareholder. A written Buy and Sell Agreement can be used if they decide that the remaining equity-holders would buy the deceased’s shares / member’s interest in the event of death.

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 seven pages.

What do you need to do to use the Buy and Sell Agreement?

• 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 life insurance policies that may have been taken out.
• Ensure all the shareholders 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.