By Brad MacLiver
Authorship and profile at Google
When a MD pharmacy is owned by two or more people the stockholders/partners should have a Buy-Sell Agreement. A buy-sell agreement is a written document that provides the procedures and governs the future sale of the pharmacy business.
Maryland pharmacy buy-sell Agreements protect the interest of the parties who own the pharmacy in MD and directs the actions triggered by a stockholder leaving the business due to death, disability, divorce, dissolution, or retirement. The agreement will govern how and when the shares of the pharmacy business can be sold, or transferred. It will also provide guidance as to how the pharmacy will be valued along with the obligations of the remaining shareholders of theMaryland
It is important to establish buy-sell agreements because the different elements of a future sale would be predetermined and won’t need to be negotiated during a heated dispute or grieving period. It also provides both the stockholder and the family a level of comfort that when the inevitable time for an exit strategy comes, the process was thoroughly thought out in advance.
The down-sides of not having a buy-sell agreement between pharmacy owners are that a disability potentially leaves one partner working more while the other is not adding to the productivity. Should a death occur without an agreement, one partner could be left with a non-productive heir, or a new partner may be inserted that who a conflicting personality with the surviving partner. Having the wrong partner is a potentially devastating scenario for theMaryland
There are various types of buy-sell agreements such as: Entity Buy-Sell Agreement, Cross-Purchase Buy-Sell Agreement, Wait and See Buy-Sell Agreement, Disability Buy-Sell Agreement. Buy-sell agreements are also known as a Business Will or a Buyout Agreement.
Potential components of a Buy-Sell Agreement:
1. The names of stockholders and the number of shares and voting rights of each.
2. Guidance for the certified pharmacy valuation inMaryland
3. Mutual covenants and considerations.
4. Restrictions on transferring, purchasing or encumbering the company’s stock.
5. Protocol in the event of a shareholder’s divorce or termination of a shareholders employment.
6. Obligation to buy/sell shares from an estate.
7. Purchase of insurance to ensure ability to meet obligations.
8. Purchase of stock paid in lump sum or by installments.
9. Remedies for breach of the agreement or default of payment.
10. Until transfer is complete the right to inspect books and records.
11. Amendments and notices for offers or legal matters.
12. Enforceability of the agreement, the binding effects, and arbitration procedures for disputes.
13. Process for dissolution, or liquidation, of the corporation.
14. Maintaining the premises during a transition.
15. Preserving representations and warranties.
16. The terms of transfer.
17. Bill of Sale.
Buy-sell agreements are often funded with a life insurance policy in order to ensure the required funding is available. Should one of pharmacy owners inMaryland
Life insurance coverage for each partner needs to be in place, because without a way to accomplish the purchase of the MD pharmacy shares the buy-sell agreement will not be functional. As the business grows and develops the amount of insurance need to be adjusted to provide an adequate coverage. Without the insurance the surviving stockholder may not have enough cash to satisfy the amount required to buy out the estate - leaving the survivor with an unwanted partner.
To acquire the adequate insurance coverage and determine the specifics of the buy-out terms, it is necessary to perform a certified pharmacy business valuation. There are a large number of companies that provide business valuations. Due to the dynamics and current market conditions of theMaryland
Because pharmacy buy-sell agreements are such extremely important documents, they need to be completed with utmost seriousness and care. Even with a long standing partnership, it is only too late to create a buy-sell agreement when an event has already occurred....that would require the document.
Tips:
1. Buy-Sell Agreements are critical documents that should not be taken lightly. Consult a licensed professional.
2. Documents must address the proper laws and regulations which vary from state to state. Seek the proper guidance.
3. Premiums for insurance that will fund the buy-sell agreement might be deductible.
4. Ensure that theMaryland
Authorship and profile at Google
When a MD pharmacy is owned by two or more people the stockholders/partners should have a Buy-Sell Agreement. A buy-sell agreement is a written document that provides the procedures and governs the future sale of the pharmacy business.
Maryland pharmacy buy-sell Agreements protect the interest of the parties who own the pharmacy in MD and directs the actions triggered by a stockholder leaving the business due to death, disability, divorce, dissolution, or retirement. The agreement will govern how and when the shares of the pharmacy business can be sold, or transferred. It will also provide guidance as to how the pharmacy will be valued along with the obligations of the remaining shareholders of the
It is important to establish buy-sell agreements because the different elements of a future sale would be predetermined and won’t need to be negotiated during a heated dispute or grieving period. It also provides both the stockholder and the family a level of comfort that when the inevitable time for an exit strategy comes, the process was thoroughly thought out in advance.
The down-sides of not having a buy-sell agreement between pharmacy owners are that a disability potentially leaves one partner working more while the other is not adding to the productivity. Should a death occur without an agreement, one partner could be left with a non-productive heir, or a new partner may be inserted that who a conflicting personality with the surviving partner. Having the wrong partner is a potentially devastating scenario for the
There are various types of buy-sell agreements such as: Entity Buy-Sell Agreement, Cross-Purchase Buy-Sell Agreement, Wait and See Buy-Sell Agreement, Disability Buy-Sell Agreement. Buy-sell agreements are also known as a Business Will or a Buyout Agreement.
Potential components of a Buy-Sell Agreement:
1. The names of stockholders and the number of shares and voting rights of each.
2. Guidance for the certified pharmacy valuation in
3. Mutual covenants and considerations.
4. Restrictions on transferring, purchasing or encumbering the company’s stock.
5. Protocol in the event of a shareholder’s divorce or termination of a shareholders employment.
6. Obligation to buy/sell shares from an estate.
7. Purchase of insurance to ensure ability to meet obligations.
8. Purchase of stock paid in lump sum or by installments.
9. Remedies for breach of the agreement or default of payment.
10. Until transfer is complete the right to inspect books and records.
11. Amendments and notices for offers or legal matters.
12. Enforceability of the agreement, the binding effects, and arbitration procedures for disputes.
13. Process for dissolution, or liquidation, of the corporation.
14. Maintaining the premises during a transition.
15. Preserving representations and warranties.
16. The terms of transfer.
17. Bill of Sale.
Buy-sell agreements are often funded with a life insurance policy in order to ensure the required funding is available. Should one of pharmacy owners in
Life insurance coverage for each partner needs to be in place, because without a way to accomplish the purchase of the MD pharmacy shares the buy-sell agreement will not be functional. As the business grows and develops the amount of insurance need to be adjusted to provide an adequate coverage. Without the insurance the surviving stockholder may not have enough cash to satisfy the amount required to buy out the estate - leaving the survivor with an unwanted partner.
To acquire the adequate insurance coverage and determine the specifics of the buy-out terms, it is necessary to perform a certified pharmacy business valuation. There are a large number of companies that provide business valuations. Due to the dynamics and current market conditions of the
Because pharmacy buy-sell agreements are such extremely important documents, they need to be completed with utmost seriousness and care. Even with a long standing partnership, it is only too late to create a buy-sell agreement when an event has already occurred....that would require the document.
Tips:
1. Buy-Sell Agreements are critical documents that should not be taken lightly. Consult a licensed professional.
2. Documents must address the proper laws and regulations which vary from state to state. Seek the proper guidance.
3. Premiums for insurance that will fund the buy-sell agreement might be deductible.
4. Ensure that the
