Discover the value of Buy-Sell agreements in ensuring the stability of your closely-held business in this comprehensive guide. Buy-Sell agreements provide a critical contingency plan for business owners, helping manage unforeseen circumstances like the death, divorce, disability, or bankruptcy of a partner while assuring operational continuity and fair compensation.
In this video, we illuminate the benefits of such agreements in preventing litigation, offering clarity, and providing actionable strategies for various triggering events. The complex but crucial subject of business valuation forms a significant part of our discussion, as we review various methodologies - from fixed-price, formula-driven models to evaluations based on business assets or revenue multiples.
We emphasize the necessity of an adaptable and realistic valuation model, highlighting potential pitfalls, such as undervaluation in young companies, and the significance of revisiting and adjusting the valuation mechanism as the business develops.
We also address potential conflicts that may surface, particularly when a majority of the board, in charge of setting the value, may be tempted to set an unfairly low value. This can lead to disputes, especially when a minority interest is seeking an exit.
This guide is designed to help you comprehend how Buy-Sell agreements can serve as a well-structured plan, reducing the chances of disputes that could disrupt your business or escalate into costly litigation.
About the Firm
Hopkins Centrich Law is a dynamic law firm, under the leadership of Kirby Hopkins and Joseph Centrich, with a focus on business and litigation matters. We also provide insightful general counsel and strategic legal business advice to enterprises and their proprietors. Our leading attorneys maintain a broad civil practice, primarily concentrating on business and commercial issues. Our expert legal services are divided into the following practice areas:
Commercial and Civil Litigation
- Business Transactions and Formation
- General Counsel Services
- Construction Projects and Disputes
- Shareholder Rights
We bring together our comprehensive knowledge and dedication to provide customized legal solutions that address our clients' unique needs. Our aim is to offer strategic and reliable legal advice that empowers our clients to confidently navigate the complexities of the business world.