Create a market for your business interest at your death Set a "fair value" for your interest in the business Provide cash to your family at your death Protect against unwanted third parties becoming owners Prevent deadlock problems Provide a known business continuity at an owner's death Preserve an S-corporation status Other reasons: (Please specify)
2. What type of entity is your business?
Limited Liability Company (LLC)
Limited Liability Partnership (LLP)
Limited Liability Limited Partnership (LLLP)
Other form of business:(Please explain)
Type of Ownership:
Family relationships to other owners, if applicable:
4. What events should be limited by the buy/sell agreement?
Death of an owner
Disability of an owner
Termination of employment other than by death, disability, or normal retirement
Outside third-party offer
Divorce, bankruptcy, or creditor claim against an owner
Termination of license if a professional practice
Pledging or assignment of the business interest as security for a debt
Other: (Please explain)
5. What events should be allowed?
Gift to family members
Estate planning transfers (for example, revocable or irrevocable trust)
6. Who should buy the business interest?
Other owners (cross purchase)
Employee Stock Ownership Plan (ESOP)
Should be determined at the time of the triggering event (wait and see)
Business control should pass to the other owners but the remaining interest should pass to the deceased owner's family (no-sell buy/sell)
At the triggering event
After being offered to other owners or entity first
7. Valuation of the business
How much is the business value?
What methods did you use to value the business?
8. Valuation of less than 100 percent ownership:
Should the value be reduced for any of the following:
Certain events (For example, walk away to set up
a competing business)
What discount should be used?
9. How should the business interest be sold?
Cash Some cash down and the remainder over time (installment sale)
What interest rate?
Restriction on transfers, dividends, etc., until the interest is fully transferred and paid?
10. Should the purchase be fully or partially funded by insurance if it is cost effective?
11. What happens at the death of a business owner?
What will happen to your business or your ownership interest at your or another owners death?
12. Sold as a going concern:
At what price?
Will the buyer have funds?
Written agreement exist?
Date entered into:
Date last reviewed:
Can we have a copy of the agreement?
13. Passed to an heir or beneficiary:
Who will inherit?
Able to operate business now?
Able to operate business in the future?
Who will operate business in the interim?
Do you have a specific plan to keep that person
in the business?
Is adequate capital provided to accomplish transition to successor management?
Will any other person (for example, a spouse) need income from the business?
Is cash available for an orderly liquidation?
Is cash available to pay business debts?
If business is liable?
If owners are personally liable?
Total proceeds expected from liquidation:
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