Castro Valley, CA – Financial Adviser Discusses Benefits of a Buy-Sell agreement

3 reasons you need a buy-sell agreement for your business, from a local financial adviser

Want to be a successful new small-business owner? There are many vital steps to take before making your first sale. From creating a business plan to securing the right location, to finding quality employees and more, there are plenty of ways to help your business run smoothly.

A professional financial adviser can help with another important step: setting up a buy-sell agreement. Based in Castro Valley, business advising is one of the several financial services I provide to locals.

A buy-sell agreement is essential for business owners to carefully structure and plan for their new entity. In a business owned by two or more people, this means making clear who owns what and how the ownership interest is divided.

Buy-sell agreement documents or clauses specify what is to happen if an owner is removed from the business. This could be due to an owner choosing to step down, incapacitation, divorce, death or another unforeseen change.

Here are three reasons why a buy-sell agreement can be beneficial to your business.

1. No stress, no mess!

A buy-sell agreement is not a succession plan. It’s an emergency plan that allows the business to keep running smoothly and adapt to unexpected change.

Sudden changes in business ownership can cause harmful interruptions. By establishing an emergency plan beforehand, there won’t be any confusion on how to move forward in the event of change.

2. Peace of mind for families

The welfare of a business has an impact on more individuals than business owners themselves. Families of owners depend on and benefit from the success of their company.

With a buy-sell agreement, everyone can get on the same page. If something were to happen, they’ll already understand how company ownership would be divided and what payouts would occur – information they’ll need to plan for their futures.

3. Strong credit

A buy-sell agreement adds strength to a company from a credit-worthiness standpoint. It assures banks and other financial stakeholders that the company will keep operating regardless of changes to ownership. Strong credit is helpful for when the company needs to borrow money or enter into a partnership.

As an owner who’s part of a business partnership myself, I’ve found a buy-sell agreement is essential for more than the reasons above. You’ll be prepared for insurance payouts, transfer of ownership to heirs, buying shares for other partners, and/ or any number of scenarios agreed upon in advance.

Your business can thrive financially with a little bit of assistance. I’m here to help you plan for success through buy-sell agreements and other important financial planning steps for businesses, including investments*, life insurance and annuities. Call today to learn how I can lend your business a hand.

* Securities and advisory services offered through MWA Financial Services, Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA, SIPC.

Tax and legal issues are complex. Consult your tax advisor and attorney before making a decision.