When a Colorado business has more than one owner, the importance of having a legally sound buy-sell agreement in place cannot be stressed enough. Contrary to their name, these agreements have little to do with buying or selling the business. Rather, they have a lot to do with defining the rights of the individual owners by controlling when an owner may sell his or her interest in the enterprise.
Buy-sell agreements, also known as buyout agreements, are important to have in place. Every day a business operates without having one increases the financial risks assumed by the individual co-owners. The agreements can control who may buy an owner’s business interests. They may also be used to help avoid estate taxes in the event a co-owner passes away.