By using a Buy-Sell Agreement the business continues uninterrupted, which benefits the buyer, the heirs of the estate, and the community.
For example, through a Buy-Sell Agreement, the buyer acquires the sole proprietorship as an actively operating business. When it is properly arranged, it will include the financing of the purchase price, the sole proprietor’s estate receives the full value of the business in cash. The deceased sole proprietor’s estate suffers no losses because of forced liquidation.
As you can see when you say “I’m going to be self-employed,” be sure to think of the end as well as the beginning. Though you are the owner of the company, there are others to think of as well, especially if you have a spouse and children.
Buy-Sell Agreements are important when there is a Sole Proprietorship, Partnership, Corporations and even LLC’s. Keep in mind that when you open an office in whatever community you choose, you are now a contributing factor to that community economically, because you are a business. Anytime a business goes out of business it has an economic effect on the community.
Planning is important. Speak with your Financial Consultant to put a solid plan together.