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A Buy-Sell Agreement sets out the rules for business partners to buy or sell their ownership stakes in a company. It's like a prenup for business - it clearly spells out what happens when an owner wants to leave, retire, or passes away. In New Zealand, these agreements are especially important for small and medium enterprises, where unexpected ownership changes can seriously impact business stability.

The agreement typically covers key details like how to value the business shares, payment terms, and who can buy them. It helps prevent disputes by establishing a clear process upfront and protects the remaining owners from unwanted new partners. Most Kiwi companies pair these agreements with appropriate insurance policies to ensure there's money available to fund any required share purchases.

A Buy-Sell Agreement becomes essential when starting a business partnership or bringing new shareholders into your company. It's particularly valuable for New Zealand's family businesses, professional practices, and closely-held companies where maintaining control over ownership is crucial. The best time to put this agreement in place is when relationships are positive and everyone can think clearly about future scenarios.

Common trigger points include: bringing on new business partners, expanding family involvement in the business, or planning for retirement or succession. Many Kiwi business owners create these agreements during major changes like mergers, when adding key employees as shareholders, or when setting up business continuity plans with their advisors.

• Shareholder Buyout Agreement: The most common type, designed for company shareholders to buy each other out, often triggered by retirement or exit
• Sell and Buy Agreement: A cross-purchase agreement where each owner agrees to buy shares directly from departing owners
• Sale And Buy Back Agreement: Allows for temporary share transfers with an option to repurchase, useful for restructuring or succession planning

• Business Partners/Shareholders: The primary parties who sign and are bound by Buy-Sell Agreements, including majority and minority shareholders in Kiwi companies
• Company Directors: Often involved in negotiating and implementing the agreement terms, especially in family businesses or closely-held companies
• Corporate Lawyers: Draft and review the agreements to ensure compliance with NZ Companies Act and other relevant laws
• Business Advisors: Help structure terms, determine valuation methods, and integrate with succession planning
• Insurance Providers: Supply life or disability insurance policies that fund buy-sell obligations

• Company Details: Gather current shareholding structure, company constitution, and existing shareholder agreements
• Valuation Method: Decide on how shares will be valued when triggered - fixed price, formula, or independent valuation
• Trigger Events: List specific events that activate the agreement like death, disability, retirement, or voluntary exit
• Funding Strategy: Plan how share purchases will be funded, including insurance policies or installment arrangements
• Payment Terms: Define clear timeframes and methods for completing share transfers and payments
• Digital Generation: Use our platform to create a legally-sound Buy-Sell Agreement that includes all required elements

• Party Details: Full legal names and addresses of all shareholders and the company
• Transfer Triggers: Specific events that activate the buy-sell provisions, clearly defined and measurable
• Valuation Mechanism: Detailed method for determining share price when agreement activates
• Payment Terms: Clear timeline and conditions for completing the purchase
• Funding Provisions: How purchases will be funded, including any insurance requirements
• Dispute Resolution: Process for handling disagreements under NZ law
• Execution Block: Proper signature sections meeting Companies Act requirements

A Buy-Sell Agreement is often confused with a Buyout Agreement, but they serve different purposes in New Zealand business law. While both deal with ownership transfers, their scope and application differ significantly.

• Timing and Purpose: Buy-Sell Agreements are proactive planning tools set up when business relationships begin, while Buyout Agreements typically address immediate or short-term ownership transfers
• Scope of Coverage: Buy-Sell Agreements cover multiple potential future scenarios (death, disability, retirement), whereas Buyout Agreements focus on a specific, planned transfer of ownership
• Party Structure: Buy-Sell Agreements usually involve all owners and remain dormant until triggered, while Buyout Agreements typically involve active negotiations between specific parties
• Funding Mechanisms: Buy-Sell Agreements often include insurance provisions and long-term payment structures, but Buyout Agreements usually specify immediate payment terms