Buy-Sell Agreement Define

Accountants and appraisers can help identify valuation language issues and help business owners and their lawyer choose a more accurate valuation language. In the case of a transaction carried out by a legal person, a purchase-sale contract may take the form of a “cross purchase” contract, when the current owners acquire the shares of the outgoing owner or a withdrawal contract in which the company buys back and withdraws the shares of the outgoing owner, or if the proceeds of the insurance policy are not sufficient to cover the full purchase price of the shares of the outgoing owner, a hybrid cross-purchase/buyback contract, under which the company buys back and destroys all remaining shares that have not been acquired by the remaining owner. The agreement usually offers a mechanism for determining the selling price. .

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