Business Planning Attorneys - Buy-Sell Agreements
The most common reason a privately held business fails is the lack of a succession plan. Something unexpected happens – a partner’s sudden death or disability; an owner needs ‘out’; a divorce splits ownership – and without the instructions and guidance of a solid succession plan the strain on and cost to the business is too much for it to bear. It’s sold, broken up, and maybe hangs on for a year or two before it ends up closing its doors.
A Buy-Sell Agreement is a major – if not the most important – tool in ensuring that a company survives the unexpected. And more. They are an integral tool for any business. Done right, they can ensure the survival of a business for generations.
A buy-sell agreement is a legally binding contract between the shareholders of a closely held company that outlines the terms and conditions for the transfer of shares in certain specified situations.
One of the primary purposes of a buy-sell agreement is to prevent future conflict and provide an orderly transfer of ownership interests in a closely held firm. The terms are binding on heirs and successors-in-interest.
Hopkins Centrich, The Woodlands' premier business law firm, has been providing expert legal services to medium-sized companies and closely held businesses for decades.We are well-versed in the required documents and possess the expertise to draft them, ensuring legal compliance and alignment with our clients' specific needs.
Over the years we have been the law firm for a variety of privately-owned companies from tech to software developers, healthcare providers, architectural firms, real estate developers, retailers, restaurants, breweries, CPA firms, and others.
Hopkins Centrich has been the “ go-to” legal advisor to start-up ventures and more mature closely held and family-owned businesses, and national enterprises for over two decades.
What Makes an Effective Buy-Sell Agreement?
Buy-sell agreements are – or at least should be – comprehensive contracts that anticipate future events and needs. Key features include:
Parties - The shareholders and the company itself are parties to the agreement.
Share transfer restrictions - The agreement places restrictions on the ability of shareholders to freely transfer their shares.
Triggers - It sets forth trigger events requiring or allowing the purchase of shares, such as death, disability, retirement, divorce, or termination of employment.
Valuation - A formula or process for establishing the fair value buyout price for shares is defined.
Funding - Mechanisms to fund share purchases are specified, such as insurance policies or sinking funds.
Purchase terms - The timing, payment schedule, closing requirements, and other terms for share purchases under the agreement are detailed.
Purchase options - The agreement outlines if the buyout is mandatory or an option, and whether the company and/or shareholders have the option to purchase the shares.
Right of first refusal - The agreement may provide a right of first refusal governing share transfers.
Dispute resolution - A process is defined for resolving any disputes over valuation, terms, timing, or other issues. Here are some key elements that help make an effective buy-sell agreement for a closely held company.
Hopkins Centrich, Your Business Attorneys
Hopkins Centrich is a full-service business law firm that handles all business-related law issues (as well as the occasional compliance issue) for a variety of privately owned companies, tech firms, healthcare providers, architectural firms, among many others . . . as well as advisor to start-up ventures.
About Hopkins Centrich
Hopkins Centrich PLLC provides cutting-edge, high-quality, creative legal solutions for business and business owners in Texas.
Our attorneys and staff have decades of experience in virtually every aspect of business law in The Woodlands and Texas. We have designed and incorporated businesses, managed their every legal concern, engaged in litigation on their behalf, aided with mergers and acquisitions, managed mergers, acquisitions, and sales.
Hopkins Centrich knows Texas business law. We are uniquely positioned to help business owners from startup to merger or sale or transfer to family members.
When we work with a client, our sole focus is on them. We take advantage of everything technology has to offer to optimize how we work. That gives us more time to spend with you, more time to understand the issues, and more time to negotiate and prepare for trial.
We get that no one wants to contact a law firm unless they feel they absolutely have to. When they do, it almost always means that ‘things have reached a head.’
The attorneys and staff of Hopkins Centrich understand business. We understand business owners. We will make any legal process understandable; you will know what is happening with your case every step of the way, and you will never have to track us down for answers.
How We Work
Hopkins Centrich is a team with a deep bench. All our attorneys have extensive litigation experience which they fully use when called for.
Hopkins Centrich’s attorneys all have ‘big firm’ backgrounds. They formed our firm with the goal of keeping the best of those firms while employing far more personal experience for our clients.
We do this by using technology to its fullest. We will make use of every cutting edge legal and business technology and methodologies to ensure that we will continue to deliver the highest quality legal services to our clients while allowing us to respond promptly and efficiently to client needs, exceed project requirements, operate effortlessly with narrow timeframes, and develop innovative and flexible legal solutions at competitive fees.
We are creative. We are agile. We quickly adapt to rapidly changing circumstances, including changes in the law.
Our vision statement may sum it up best. We will deliver highly skilled, ethical, and aggressive legal representation to every client by:
Responding promptly to our clients’ needs;
Anticipating business and legal trends that may affect our clients;
Managing our clients’ matters in an efficient, caring, and proactive manner;
Communicating regularly and clearly with our clients