A buy-sell agreement may be thought of as a sort of "premarital agreement" between business partners/shareholders. It is sometimes called a 'business will'.
A buy-sell agreement is made up of several legally binding clauses in a business partnership or operating agreement that can control the following business decisions:
The most common events that trigger a buyout are: death, disability, critical Illness, retirement, or an owner leaving the company.
An insured buy-sell agreement (agreement funded with Life, Disability or Critical Illness insurance on the participating owner's lives) is used to ensure the buy-sell arrangement is well-funded and also to guarantee there will be money when the buy-sell event is triggered.