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Why a Buy/Sell Agreement Helps Avoid Partnership Disputes

A Philadelphia partnership and shareholder disputes attorney provides assistance when partnership disputes arise. It is common for partners and shareholders in closely held companies to experience disagreements. While these disagreements can sometimes be healthy by encouraging creative solutions, they can also be destructive if partners or shareholders cannot agree on what is best for a business and cannot continue to work productively together to advance the company’s interests. 

Curley & Rothman, LLC has provided extensive assistance to companies in taking steps to avoid damaging disputes among partners and shareholders that can have an adverse impact on the health of a business and on a company’s brand. We also provide help in resolving disputes when they arise. You can contact a Philadelphia partnership and shareholder disputes attorney to find out more about the services that we offer and the ways in which we can assist you.

One important service our attorneys provide is assistance with the creation of a buy/sell agreement. This type of contract should be created when you start a company with others and it can serve many important purposes, including helping you to avoid partnership disputes that may arise in the future. Give us a call to find out more about how you can create a buy/sell agreement and about how such a contract can help you to avoid damaging disagreements that affect business operations.

What is a Buy/Sell Agreement?

A buy/sell agreement is a contract that you sign which specifies what will happen if any co-owner of a company has to leave the business for any reason, or if any co-owner of a company passes away.

In partnerships and closely held corporations, co-owners often have to work very closely together to make decisions for a company and to manage and oversee business operations. Buy/sell agreements are necessary to make certain that the co-owners of a business have some say in who takes an ownership stake in the organization.

Buy/sell agreements are also important because the valuation of a partnership interest or the valuation of a closely-held company can be very difficult. The time to work out how a company is going to be valued should be when the company is first starting out, rather than when it actually comes time for someone to leave the organization.

When the company is starting, no one knows who will end up having to leave, or when or why a departure will occur. As a result, everyone is likely to be fair and impartial in setting a specific process for valuation of the company and for ensuring an orderly departure. At the time when someone actually does leave, there is far more potential for fighting about what that departing partner’s interest is worth.

How Can a Buy/Sell Agreement Help You Avoid Partnership Disputes?

A buy/sell agreement helps in many important ways to avoid partnership disputes. One of the single most important things that a buy/sell agreement can do is to control who can have an ownership interest in the company. For example, the contract could specify that if any of the co-owners of the business have to depart and give up their ownership share, that the remaining co-owners have first rights to buy the shares.

By controlling exactly who takes ownership of the interest in the company, a buy/sell agreement can make certain that none of the co-owners end up having to work with someone that they do not like and do not feel that they can maintain an amicable working relationship with. By controlling whose hands the company falls into, many serious business disputes and disagreements can thus be avoided even before those disagreements ever begin.

Getting Help from A Philadelphia Partnership and Shareholder Disputes Attorney

A Philadelphia partnership and shareholder disputes attorney can provide invaluable assistance with the creation of a buy/sell agreement. Curley & Rothman, LLC can help you to negotiate a contract that protects your interests and that is amenable to all co-owners of the business. We can also help to make sure that the contract is comprehensive and the language is clear so the contract will help to prevent disputes and problems in the future.

If a partnership dispute does arise, our legal team can also assist you in responding to the disagreement in the most effective way possible to protect your short-term goals and your company’s long-term business interests. Give us a call at 610-834-8819 or contact us to find out more about the ways in which a Philadelphia partnership disputes lawyer can help you to reduce the possibility a disagreement will arise.

Business LawScott Rothman