While a buy-sell agreement is useful for all small businesses, it is especially important for LLCs with more than one owner. This prevents the dissolution of the CLL if a member takes into account the rights of the member and his or her family. For an individual entrepreneur, a purchase-sale contract can arrange for a takeover by an employee or family member if the original owner retires or dies. For example, if you entrust the business to a successor, the inheritance tax due to LLC may be reduced. √ If the company is an S company, it is advisable to include in the purchase sale provisions ensuring that the company does not lose its S status. Cross-purchase partnership agreements. Since the value transfer rule can apply to a trust agreement, the “partnership agreement” has become popular. This provision is similar to the trust provision. But instead of creating a trust, the partners form a partnership. Small businesses should regularly have this important agreement reviewed by their accountant and lawyer for two reasons: (1) legislative changes do occur; and (2) changes in the structure and operation of the business may affect some of the provisions of the sales agreement. Unlike the case of a simple buy-back sale or cross-purchase-buy-sell, a hybrid agreement offers purchase options to both owners and the business.
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