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The Many Flavors of Buy/Sell Agreements – Each with Their Own Time Bomb

The Many Flavors of Buy/Sell Agreements – Each with Their Own Time Bomb

By Nina Kaufman, Esq.

Here’s one last issue that Chris Mercer raised in his Buy/Sell Agreements book that I want to share with you. Once you have (1) decided when an event triggers a buyout, and (2) computed how you’ll fund the purchase, you need to determine who gets to make the purchase and how you’ll come up with the buyout amount. As to who get to purchase, buy/sell agreement fall into three main categories, just as Baskin Robbins ice cream has single flavors (chocolate), mixed flavors (Gold Medal Ribbon (R)), and textured (ah, Rocky Road). There are: Cross-purchase agreements. The business owners will take the responsibility to buy the ownership interests from each other when the trigger event occurs. Entity-purchase agreements. The company buys the interest back from the owners. Hybrid agreements. The company gets first dibs at the ownership interest but if it refuses, the remaining owners get the opportunity to acquire the departing interest. How much will you pay for the interest? Well, to take the poet, Elizabeth Barrett Browning, out of context, “Let me count the…

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Nina Kaufman

Flying solo doesn’t have to mean going it alone.

I’m Nina Kaufman.

I know first-hand that running a knowledge-based service business has unique challenges. It’s so much easier when you have an advocate in your corner. Over the past 25 years, I’ve worked with thousands of New York business professionals who want a legal advisor to guide and support them as they navigate the business world.

With wide-ranging experience as a business attorney, strategist, and media authority, I bring the added power of a business lens to the legal issues my clients are facing.

And because I’ve been a business owner myself, I’ve lived through the soaring highs and devastating lows – like when my first law firm failed. So I understand what’s involved to serve great clients, detect business risks early and build a true legacy.

I can’t get those 12 years back. That’s why I have made it my mission to ensure that business professionals like you can become wise and discerning leaders, build a solid business, and live your best life.