Pennsylvania Buy-Sell Agreements
By Sean Quinlan, Esq. · Updated January 15, 2025
A buy-sell agreement is a contract among co-owners that controls what happens to a business interest at death, disability, departure, or divorce.
Cross-purchase
Surviving owners individually buy the deceased owner's interest. Each owner holds insurance on each other owner.
Entity purchase
The business buys back the interest. The business holds policies on each owner. Simpler with many owners.
Funding
Life insurance is the standard funding mechanism. Disability buyout insurance is the often-skipped companion.
Valuation
Annual valuation update or formula-based, plus a fallback appraisal process for stale numbers.
This article is general information about Pennsylvania law as of the update date above. It is not legal advice for your situation and does not create an attorney-client relationship. For advice on your specific facts, please schedule a consultation.
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