Why Buy/Sell Agreements Matter

Why buy/sell agreements matter

The majority of businesses created in the United States are small businesses. Therefore, many of these companies are not publicly traded and thus create the need for Buy/Sell agreements.

Closely-held businesses are formed as LLC’s, Partnerships, or C-Corporation. So, determining the value of a closely held corporation is challenging. Large publicly traded corporations do not face this issue since their value is determined by the markets daily.

Major Concerns of Closely-Held Small Business

The greatest issues facing Closely-held businesses is succession. Therefore, Buy / sell agreements are used for the transition of ownership when a partner dies, retires, or exits the business.

Types of Buy/Sell Agreements 


The remaining owners purchase the shares of the business at a predetermined price.

Redemption Agreement

The business entity buys the share of the business.

Life insurance is also used to fund Buy/Sell agreements. These agreements are tailored to the needs of business owners. The use of Life Insurance is the most common method.

So, planning for the transfer of business assets demands the same degree of attention as planning your personal estate. So, succession plans should be reviewed when you review you estate plan. The same life events apply.

Act Now!

Planning today will save time and eliminate uncertainty.   Because, death, divorce, and retirement will occur at some point in all businesses.  Having a plan in place is essential to the long-term survival of a business.

The amount of planning required will vary from client to client and business to business.  So, you won’t find a cookie cutter approach at T.L. Morson and Associates. The objective of any plan is to transfer wealth to the next generation in the most tax efficient way possible.

Life can change in the blink of an eye.  Having your affairs in order is not just for you, it’s for the ones you leave behind.  A comprehensive plan is more than just the drafting of documents.   A well-constructed plan requires expert knowledge of tax and finance.

The T.L. Morson team brings a wealth of knowledge in the areas of Estate Planning , Business Consulting, and Accounting Services.

Theo L. Morson, JDLLM – Mr. Morson holds a bachelor’s degree in Accounting, a Master of Laws Degree specializing in Corporate Law and Finance, and a Juris Doctor (JD) Degree from Western Michigan University Cooley Law School. Theo has worked as a Financial Consultant and Accountant for 25 years.

Call today to Schedule a review today!

Follow Us on Facebook

The Time to Act is Now!

April 24, 2020

The Time to Act is Now!

The time to act is now. We hope this post finds you and your family staying home and staying safe.  It’s amazing how fast times can change in such a short period of time. Thousands of Americans have tragically loss their lives in just the past few months from Covid-19 virus. Michigan is one of the hardest hit states in the country. The nation is being tested and there is no end in sight.

50%of Americans are Unprepared

Times like this that remind us of the need to prepare for what will eventually happen to all of us, death and taxes.    A recent study conducted by Merrill Lynch found nearly half of all American’s over the age of 55 still do not have a Will.  To make matters worse, only 18 percent of people in that age range have all of the recommended legacy plan essentials: a will, a health care directive, and durable power of attorney.

Often times when the topic of estate planning comes up people often think that they cannot afford an estate plan or that a Will is more than enough to satisfy their needs.  However, two of the most essential pieces to a complete estate plan are a health care directive and durable power of attorney.  A Power of Attorney is essential if you become ill and unable to make medical and financial decisions. 

T.L. Morson and Associates provides a full range of estate planning services. Our services include Wills, Trust, Powers of Attorney for Health, and Durable Powers of Attorney.  Documents do not complete an effective estate plan.  Advice and experience does.  Contact us for your free consultation.

Follow Us on Facebook