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A Disability Buy-Sell Agreement is crucial for businesses operating in Canada where multiple owners or partners are involved. This agreement provides a clear framework for business continuation when an owner becomes disabled, preventing potential disputes and ensuring business stability. The document, subject to Canadian federal and provincial legislation, typically includes disability insurance provisions, valuation methods, and transfer procedures. It's particularly important for closely-held businesses and professional practices where owner participation is crucial to success. The agreement addresses both permanent and temporary disability scenarios, insurance funding requirements, and complies with Canadian tax and corporate regulations. This type of agreement should be established when the business is healthy and all owners are active, rather than waiting until a disability occurs.
