Plan for a business partner's exit
We agree the exit terms now, while nobody has a reason to argue about them.Every business with more than one owner eventually faces one leaving. Death, illness, divorce, a falling out, or just a change of mind. Agreed in advance it is a process. Agreed at the time it is a negotiation between people whose interests have stopped being the same.
Agreed before it is personal
The terms get settled by owners who do not yet know which side of them they will be on.
Funding that actually exists
Insurance and payment arrangements coordinated with your adviser so the buyout can be paid for.
A family kept out of it
A death or illness follows an agreed process instead of a negotiation with a grieving family.
What a buy-sell agreement settles in advance
A buy-sell agreement is a contract between co-owners setting out what happens when one of them exits. It answers four questions before anyone needs them answered. What events trigger a buyout, what then happens, how the departing owner’s share is valued, and where the money comes from.
Without it there is no agreed value, no funding, and no timetable. The remaining owners negotiate with a departing partner, or with a deceased partner’s family, at the moment they have least in common.
What events should trigger a buyout?
The common list is death, disability, divorce, default, departure, disagreement and deadlock. Which of them matter most depends on your ownership. A good agreement deals with each and gives a different process where the circumstances warrant one.
How do we value a departing owner's share?
You choose the method in advance. A fixed agreed figure, an independent valuation at the time, or a formula based on earnings. A fixed figure is the clearest and goes stale fastest, so it needs reviewing regularly to stay fair.
How is a buyout funded?
Insurance commonly covers death and disability, and the policy structure has to line up with the agreement or the money lands in the wrong hands. For other triggers, instalments or external finance are the usual answers. This is where we work with your financial adviser.
We have a shareholders agreement. Is that enough?
Sometimes. A shareholders agreement governs the ongoing relationship, while a buy-sell agreement deals specifically with exits, valuation and funding. We can read what you have and tell you whether it covers exits properly or needs a separate agreement.
A partner will leave eventually, and the only question is whether it was planned for
Trigger events, valuation and funding are straightforward decisions in a quiet year and impossible ones in a bad one.
The terms are easy to agree while nobody knows who will be leaving
Co-owners avoid this conversation because it feels like planning for the partnership to fail. So the most disruptive event the business can face is the one thing nobody has documented.
When it arrives, the business needs stability and instead gets an open-ended negotiation. If the trigger was a death or an illness, the other side of that negotiation is a family. A family in the middle of the worst year of their lives.
- We will identify the trigger events that matter for your ownership structure.
- We will advise on valuation methods and help the owners agree on one.
- We will advise on funding, including insurance-funded buyouts.
- We will draft the buy-sell agreement for your business and structure.
- We will coordinate with your accountant and financial adviser so the funding works.
When a co-owner signals they want out
One of your business partners has said they want to step back. There is nothing in place dealing with how their share gets valued or bought. You and the remaining owners are heading into a negotiation that could run for months and cost a great deal. It could also divide people who have worked together for years. The business needs attention it is not getting.
What's included in your exit planning service
- Trigger event identification and advice.
- Valuation methodology advice.
- Funding and insurance structure coordination.
- Buy-sell agreement drafting.
- Review of existing shareholder or partnership agreements.
The conversation nobody wants is the one that protects everyone
Most co-owned businesses have no documented plan for a partner leaving, which is remarkable given it is certain to happen eventually.
When it does, and there is nothing in place, the outcomes are predictable. A valuation dispute neither side can resolve. A buyout nobody can fund, so the business is sold instead. A deceased partner’s spouse inheriting a shareholding and a seat at a table they never wanted. None of these is what anybody would have chosen in a calmer year.
From an unplanned exit to a process everyone already agreed
We work through the trigger events that actually matter for your ownership, then the valuation method, then the funding. Those three decisions are the whole of it, and they are much easier to make in the abstract.
Valuation can be a fixed agreed figure, an independent valuation, or a formula. Funding is often insurance for death and disability, and instalments or finance for the rest. We draft the agreement around what you settle on. We coordinate with your accountant and financial adviser, so the funding works when it is called on.
How the agreement gets made
From unprotected co-ownership to an agreed exit framework.Agree the triggers
We work through the events that should start a buyout, given who owns the business and how.
Value and fund
We settle the valuation method and coordinate the funding with your accountant and financial adviser.
Draft and sign
We prepare the agreement and make sure every co-owner understands what they have agreed to.
Buy-sell agreements and exit planning for co-owned businesses
This is the conversation co-owners put off, and the reason is understandable. Raising it can feel like a statement about the partnership rather than about the arrangements.
In practice it is easiest while nobody knows who will be leaving. The terms get agreed by people who do not yet know which side of them they will be on. We draft buy-sell agreements and coordinate valuation and funding with your accountant and adviser. We have 2 Accredited Specialists in Business Law, and we also have 2 Family Business Association accredited advisors.
Our great lawyer guarantee
Six principles we hold to, whatever you bring us and however long it takes.
Take the time
We listen carefully to understand what you want to achieve, then step you through the advice and the documents.
Share our knowledge
We pass on as much as we can, so you can make your own informed decisions.
Stick to our knitting
We only do what we are good at, so you never pay for our learning.
Work as one team
Someone is always available to answer your question or point you the right way.
Fair pricing
A fixed or capped quote for advice and documents, so you do not carry the price risk.
It is your show
We are in it for a front row seat to witness your success, not for our egos.
Have the conversation while it is still hypothetical
These terms are easiest to agree while nobody knows who will be leaving or when. Get your co-owners together and we will take you through the trigger events, the valuation and the funding. We will draft the agreement around what you decide.
More on this area of law
Read more about buy-sell agreements, business succession and shareholder arrangements, and how we can help.
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