Tag Archives: protect your business

Life insurance to fund a buy-sell agreement

Posted on: June 27th, 2012 by Peter Choma

Protecting your business for the future

Why do we need a buy-sell agreement?
A buy-sell agreement sets out the terms under which the interest of the disabled or deceased shareholder will be sold. It also contains provisions for the transfer of ownership when you retire. As well, if properly funded, the shareholder’s family will receive fair market value for the shares, providing them with capital to help maintain their standard of living.

A properly funded buy-sell agreement can:

  • Assure creditors that funds will be available to pay bills.
  • Assure existing employees that the company will have the means to continue
  • Ensure a market for each shareholder’s interest in the business
  • Set the terms under which you and your fellow shareholders agree to buy and sell each others’ interest in the business
  • Ensures surviving shareholders have the necessary funds required to buy out the deceased shareholders interest
  • Provide for your family in time of need.


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