A binding agreement used by sole proprietorships, partnerships and close corporations that governs what happens to an individual's ownership interest when that individual withdraws from the business, dies or becomes disabled. Also known as a "buyout agreement".
Definition from Nolo’s Plain-English Law Dictionary
A binding contract between co-owners that controls the purchase of a withdrawing owner's ownership interest and includes transfer restrictions that control when owners can sell their interest, who can buy an owners interest, and what price will be paid. These agreements often cover what happens when an owner retires, goes bankrupt, becomes disabled, gets divorced, or dies.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:12 pm