Why Business Owners Should Review Their Buy-Sell Agreements

A recent tax case now before the U.S. Supreme Court hasn’t gone well for a small business, highlighting the need for businesses using a similar (and typical) succession planning arrangement to take a look at theirs.

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A buy-sell agreement is a key component of business succession planning, particularly for small businesses with two or more family groups in the ownership structure. This issue is applicable for both corporations and limited liability companies (LLCs).

A buy-sell agreement provides for the possible or mandatory buyout of an owner’s interest in the business upon the occurrence of certain stated events such as death, disability, termination of employment and divorce. Often these agreements are funded at least in part by life insurance or disability insurance.

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John M. Goralka
Founder, The Goralka Law Firm

Founder of The Goralka Law Firm, John M. Goralka assists business owners, real estate owners and successful families to achieve their enlightened dreams by better protecting their assets, minimizing income and estate tax and resolving messes and transitions to preserve, protect and enhance their legacy. John is one of few California attorneys certified as a Specialist by the State Bar of California Board of Legal Specialization in both Taxation and Estate Planning, Trust and Probate.