Momentum - Business to Business Online Magazine | Page 28
The Case For Insurance
In Buy/Sell Agreements
By: Jan Laman, [email protected],
Harbour Insurance Services, Inc
If you own a business, there are many issues lurking
behind the scenes many businessowners either ignore
or simply dread having to deal with. Do you have a will
for your business? Sole proprietorships, partnerships
and small closed corporations all need to consider
what happens if the owner or one of the partners or
shareholders dies or becomes disabled. Questions such
as who will purchase the company or the deceased
partner’s or shareholder’s interest, what is a fair price,
when should the sale be made and how the deceased
owner’s/partner’s/shareholder’s families will be given a
fair shake and taken care of are all real questions all
businessowners need to properly and directly address
before the event occurs.
The business value will likely be devalued should a
supplier or creditor perceive the death of an owner/
partner to be key to the success of the business. Key
employees may consider the deceased owner/partners
death as a reason to move elsewhere. There needs to
be continuity and a smooth transition in the business
when tragic events such as deaths or disabilities occur.
The buy/sell agreement is important to resolve a lot of
problems dealing with employees, creditors, suppliers
and the deceased person’s fam