b'Does Losing a Partner Mean Losing His or Her Share ofBusiness? the Protect Your Business with a-Sell Agreement BuyBy J.Todd Gentry There\'s no delicate way toit.Alternatively, the agreement canT method of funding provides puthis your business ispart partne er Ifset up as abe set up so that if ar dies,eachpartn withthe proceeds to nership or corporation, you may bethecompanyorremainingpart purchasethecompanywithout concerned about what would hap ner(s)agreetopurchasetheirhaving toIdatea partof the iquipenbusiness if your par share, or the sharebe boughtb iness. to yourt canusner(s)orotherownersbecamebyanagreed-tothirdparty,or disabled or were to die. If awilledan agreed-to heir.Buy-Sell Entity Purchase Plan partnertoSimply becomes disabled, could he or shestated,aB -SellAgreementNow, let\'s say we have a uy corpoIith selhisorhersharetoanyone,ensuresa knownsuccessionandration w four major stock hold-evenif youdidn\'t agree withthecontinuationofthebusiness,ers:,, Jack and Jill. For Jane Johnchoice? If that partner dies, who issh anything happen to one orthisscenario, a Buy-SellEntity ould heir to his or her share of the busi more partn Pur Plan canused.this ers.chasebeIn n But aAgreement needscase, thetity purchases disability ess?Buy-Selleneach Truthis,withoutaproperlythe correct funding to beeffective;and life insurance policies on Truth is, withoutwrittenagreementinplace, yourtypically, funding comes from life*stock holder.In the event of their partner\'ssharecouldpassintoanddisabilityinsurancepolicies.deaths,business uses the prothe a properlyunwantedinexperienced hands.These policies canused to fundceeds from the liferance policy\'4"" andbeinsuwritten agreement inLikewise, if atn becomes dis two types ofellto buy back thed sharpar erBuy-S Agreements decease \'ses. abledand wants tohis or herBuy-SellCrossPurchaseAgree Despitetheirsimple strategy, sell place, your partner\'sshare back to the business, or ifments and Buy-Sellityfunding th agreementscanbe theEnt Purchaseese share could passre owner dies, can you ensure that thePlans.Here a examples of howtricky,andinvolvesmanyvaribusiness will h enough liquiditythese can work for you:ables, such as how much to fuavend into unwanted andtothateach policy, what types of policies purchaseshare? There are steps you can take toBuy-Sell Cross Purchaseareto use,what\'s the actual best inexperienced hands.assure that an heir to the businessAgreementvalue of your business, andeach is agreed upon, or thatorJane and John ownapartner\'s share in it. It\'s impor t now youbusinesstanpartner\'s the business can buy yourtogether, so they set up an agree towork with a team - you, your share shouldhappen.ment to sell theirof the busi financialplanner,attorney, anythingshares To assure that the business isn\'tness toeachotherin the caseofaccountant, and busin appraisal ess soldthe case of a\'stheir death or disability.fund theexpert - to determinestrategy (inpartner dis Tothe ability) or willed (in the event of aagreement, Jane owns atyandfu that\'sbest foryou, disabili nding partner\'s death)toanunwantedinsurance policy on J and usesyour partners, and your business. ohn third party, the partners of the busi theproceedsfromthatpolicytoDon\'t wait for disaster tostrike -ness can set up what is known as apu hn\'s s of thei agree what will be done tomorrow, rchase Jo harebus"Buy-Sell Agreement."agree ness if John becomes disabled andtoday 1 The mentbe constructed so that ifwants tosellhis share. Additioncana partnerbecomesdisabledandally, Jane owns ainsurance pol Unless it qualifies for the small life wants to sell his or her share, theicy on John, so if he dies, she cancorporation exemption, a corpoay companyorremainingpartner(s)usethe proceeds topurchasehisration m be subject to corpoagree to purchase the shar or ansharefromtheestate.Likewise,rate AMT, which may affect the e, agreed-to third party agrees to pur John owns disability and life insur tax treatment of corporate owned chase the share.ance policies on Jane.life insur policies.Consult ance Continued on15 page 10'