You know you need an exit strategy to protect your personal interests when you leave the market, but how do you go about protecting the interests of your trucking business? A buy-sell agreement serves just this purpose by laying out a legal blueprint for the future of your company. At its most basic level, a buy-sell agreement does exactly what it specifies; it guarantees a buyer and a seller in case of retirement, disability, or death. You don’t have to put your trucking company for sale to benefit from a buy-sell agreement; in fact, some states mandate that you create one.
Avoid Internal Conflict
Everything may be running smoothly today, but what if you and your business partner have a change of plans or a falling out in the future? Partner disputes, whether between spouses or colleagues, remain one of the most common reasons for business failure. A buy-sell contract specifies the terms of a partner buyout or partnership dissolution before such events take place. Without legal protection, your partner could potentially sell his shares to an outside party without your consent, pressure you into putting your truck company for sale for a less than fair price, or drag you into a lengthy lawsuit. A buy-sell agreement specifies terms and valuation methods for selling your business so you aren’t put in an awkward and potentially costly position.
Protect Your Interests
Realistically, you may not always be around to care for your company – and your family. If you or a business partner go bankrupt, become disabled, or die prematurely, a buy-sell agreement can help ensure the continued viability of your business and protect your family’s interests. Without an agreement, you may be forced to sell at a rock bottom price if you become too ill to work or if your family cannot afford to keep the company after your death. If a partner leaves or dies suddenly, you may have no choice but to buy out his shares at a price you can’t afford. By creating a formal buy-sell agreement, business owners can set guidelines for the management of future ownership transfers and specify that, in the event of a transfer, the business will receive a fair trucking company valuation.
Safeguard Business Success
Businesses thrive on stability, and a disruption like an ownership transfer will often wreak havoc on customer relations and company operations. Creating a plan for multiple exit scenarios can make for a smoother, more successful transfer, especially when that transfer is unplanned. It’s better to deal with potentially catastrophic situations before they happen, not after. Experts familiar with the transportation industry – in this case, truck business brokers – are your best resource for drafting a buy-sell document that defends your unique interests.