Buy Sell Agreements Law and Legal Definition

What is a buy - sell agreement? A buy - sell agreement is an agreement between partners of a partnership or between a shareholder and a corporation whereby the parties agree to the terms and conditions of a future sale of the partners or shareholder's interest. By signing the agreement, the party contractually limits his or her ability to dispose of his or her interest in the partnership or corporation to the terms of the agreement.

Why should I use a buy - sell agreement? A buy - sell agreement is useful in assuring the orderly transfer of interests in the partnership or corporation. By limiting a party's ability to dispose of his or her interest in the partnership or corporation, control of the partnership or corporation may be assured.

May a buy - sell agreement be modified? Yes. These agreements provide for the later modification upon written agreement by all stockholders or partners.