Have you considered what will happen if one of your business partners dies, become disabled, or wants to leave the business? It might come across as morbid, but partners should work together to protect the intrinsic value of the partnership for each individual partner and their families.
A Buy-Sell agreement is a legally binding agreement between co-owners of a business. The co-owners typically have a life insurance policy on the participating owners' lives which allows the surviving partner to pay to the decedents family for the decedents share of the partnership.
Mark J. Kohler, CPA recommends a Buy-Sell Agreement stating that this agreement can "Contain all the terms for a situation when a departing partner wants to protect his or her value in the partnership. Such agreements are additional to the business agreements of an LLC or Corporation."
For more information on buy-sell agreements and their implementation: http://www.entrepreneur.com/article/236180
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