When two or more individuals choose to form a partnership, they often neglect one critical step. Without a buy-sell or buyout agreement in place, one or more parties may find they are unable to protect their investment in the event the partnership is to be dissolved. This may be when one partner wishes to leave for any reason, if he or she goes bankrupt, divorces or passes away. Before entering a partnership of any type, it is best to consult with Business Law Lawyers in Southlake TX to ensure you have no issues in a situation such as this.
The buy-sell or buyout agreement functions as a binding contract which lays out what will take place if one partner wishes to leave the business. The document states whether the partner will need to be bought out, what price will be paid for his or her interest in the arrangement, who may purchase this partner’s share, and what other circumstances may lead to a buyout. Many look at the partnership agreement as they would a prenuptial agreement, and you may wish to do the same to better understand why a document of this type is essential.
Although you may feel you don’t need an agreement of this type, it is always best to have one. If you do not have a buyout agreement in place, the court may force the partnership to be dissolved if one partner wishes or needs to leave the agreement for any reason. This may be due to foreclosure of a debt that has been secured by the person’s interest in the partnership, his or her personal bankruptcy and more. One can never predict the future, thus this document is critical for any partnership being formed.
Visit the website of Galloway & Gilliland Law Firm to learn more about how Business Law Lawyers in Southlake TX may be of help to you. They can assist you with a buy-sell partnership agreement, contracts, mergers, acquisitions and more. Taking these tasks on yourself can lead to major problems in the future, and you don’t want to find a simple mistake has lead to severe negative financial consequences. There are times when you will find you need guidance or legal representation when it comes to your business and this is the firm to call.
