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A buy-sell agreement is a contract between business partners that outlines the steps to be taken if certain adverse events occur in the partnership. Also referred to as a buyout agreement, business will, or business prenup, it is created during stable times to prepare for potential problems. This legally binding document establishes predetermined actions for common scenarios known as the "five Ds": death, disability, divorce, disagreement, and default. Each of these events can negatively impact a business, so having a buy-sell agreement is crucial. Similar to a personal will, it ensures that there is a solid plan in place, preventing chaos and protecting the interests of the business owners.
