Business Pre Nup
July 29th, 2008
I was in Austin meeting with clients yesterday. As we discussed setting up an new business entity we talked about the importance of a Buy-Sell Agreement between the owners. This agreement is like a business pre-nuptual agreement. It lays down the rules for what happens with the 4Ds, at the begining when everyone is happy and getting along. The 4Ds I am talking about are:
Death
Divorce
Disability
Disagreement
It is important to establish how these items will be handled if one of these 4Ds should occur.
Death and Disability can often be handled with insurance. Divorce and Disagreement require coming up with a way to buy out the partner is a way that would be acceptable to either party.
This is a very important document to put in place early on with any partnership.
Entry Filed under: Business
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