Document background
A Buy And Sell Agreement (Insurance) is essential for businesses in South Africa where multiple owners wish to establish a clear succession plan. This document is typically used when business partners want to ensure business continuity and provide certainty regarding ownership transition upon death, disability, or other specified events. The agreement, governed by South African law including the Insurance Act 18 of 2017 and Financial Advisory and Intermediary Services Act, establishes the framework for one partner or the business entity to purchase the departing partner's share using life insurance proceeds. It details the valuation method, transfer procedures, and obligations regarding insurance policy maintenance. This type of agreement is particularly crucial for private companies, partnerships, and close corporations where business interests are not easily marketable or where immediate liquidity might be required for business succession.
