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A Buy-Sell Agreement protects business owners by setting clear rules for what happens to ownership shares when someone leaves the company, retires, or passes away. It's like a prenup for business partners, laying out exactly how and when shares can be transferred, and who can buy them.

Under Canadian corporate law, these agreements help prevent messy ownership disputes and keep businesses running smoothly during transitions. They typically include a valuation method for shares, payment terms, and specific triggers that activate the buying and selling process. Many Canadian small businesses and professional corporations use these agreements alongside their shareholder agreements to maintain control over who owns part of the company.

The right time to create a Buy-Sell Agreement is when you're first setting up a business partnership or bringing on new shareholders. This timing gives everyone clarity from day one about how ownership changes will work, especially in Canadian closely-held corporations and professional practices.

Common trigger points include starting a family business, expanding your partnership, or restructuring company ownership. The agreement becomes particularly valuable during major changes: when an owner wants to retire, sell their shares, faces personal bankruptcy, or in cases of death or disability. Having these rules in place before they're needed prevents costly disputes and protects the business's continuity.

• Buy And Sell Agreement: Standard corporate version used for business ownership transfers, typically including valuation methods and payment terms
• Real Estate Sales Contract: Specialized version for real estate holdings within a business, addressing property-specific transfer requirements
• Agreement Of Sale Contract: Broader version covering both assets and shares, often used in larger corporate transitions
• Real Property Sales Contract: Detailed version for commercial property transfers within corporate restructuring
• Simple Land Purchase Agreement: Streamlined version for straightforward property transfers between business partners

• Business Partners: Co-owners who sign the Buy-Sell Agreement to protect their interests and establish clear succession rules
• Corporate Lawyers: Draft and review the agreement to ensure it complies with Canadian business law and meets all parties' needs
• Professional Corporations: Medical practices, law firms, and accounting partnerships use these to manage ownership transitions
• Family Business Owners: Rely on these agreements to plan succession and protect both family and business interests
• Business Valuators: Help determine fair market value and establish pricing formulas for ownership transfers
• Estate Executors: Execute the agreement's terms when an owner passes away or becomes incapacitated

• Company Details: Gather current ownership structure, share classes, and corporate documents
• Valuation Method: Decide on how business shares will be valued when triggers occur
• Trigger Events: List specific circumstances that activate the agreement (retirement, death, disability)
• Funding Source: Determine how share purchases will be financed (insurance, loans, cash reserves)
• Payment Terms: Outline payment schedules, interest rates, and any special conditions
• Stakeholder Input: Get all owners' perspectives on transfer restrictions and preferences
• Document Generation: Use our platform to create a legally sound agreement that includes all required elements

• Parties and Purpose: Full legal names of all shareholders and the company, plus clear statement of agreement objectives
• Trigger Events: Specific circumstances that activate the buy-sell provisions
• Valuation Method: Detailed formula or process for determining share price
• Purchase Terms: Payment schedules, financing arrangements, and transfer procedures
• Right of First Refusal: Rules governing existing shareholders' priority to purchase
• Insurance Provisions: Requirements for life or disability insurance to fund purchases
• Dispute Resolution: Clear process for handling disagreements under Canadian law
• Governing Law: Explicit statement that Canadian provincial/federal laws apply

While Buy-Sell Agreements and Buyout Agreements might seem similar, they serve distinct purposes in Canadian business law. A Buy-Sell Agreement is proactive and ongoing, setting rules for future ownership transfers, while a Buyout Agreement typically handles a single, immediate transaction.

• Timing and Duration: Buy-Sell Agreements remain dormant until triggered by specific events (death, retirement, disability), while Buyout Agreements execute an immediate ownership transfer
• Scope of Coverage: Buy-Sell Agreements cover multiple scenarios and all owners, whereas Buyout Agreements focus on one specific transaction between identified parties
• Valuation Methods: Buy-Sell Agreements usually include flexible formulas for future valuations, while Buyout Agreements state a fixed, negotiated price
• Funding Mechanisms: Buy-Sell Agreements often incorporate insurance policies or structured payment plans, but Buyout Agreements typically rely on immediate financing or payment terms