A buy/sell agreement is a contract between business partners where the surviving partners buy out the other partner’s interest should a specific event occur. Specific events usually include death, and long-term disability. A buy-sell agreement can consist of several clauses in a partnership or shareholder agreement. It can also take the form of a separate, freestanding agreement. This suite contains free-standing agreements that can be used together with a partnership, company or unit trust.

Buy Sell Agreement – Corporate Trustees (Australia)

About This Agreement

This Buy Sell Agreement is designed for businesses where proprietors hold their interests through Corporate Trustees. It sets out what happens if a proprietor dies, becomes totally and permanently disabled, retires, or otherwise leaves the business. The remaining proprietors have the right to buy the departing proprietor’s share, and the departing proprietor (or their estate) must sell.

This ensures a smooth transfer of ownership and certainty for succession planning under Australian law.

Key Features

• Definitions of “Buy Option”, “Sell Option”, “Option Event”, “Funding Agreement”, “Market Value”, and “Terminating Proprietor”

• Mutual buy and sell options granted between proprietors

• Procedures for option notices, timeframes, and exercising rights

• Valuation process for determining the market value of shares

• Payment provisions linked to insurance funding agreements

• Transfer obligations including instruments of transfer and timing

• Restrictions on dealing with, charging, or encumbering shares

• Termination provisions for breach or mutual agreement

• General provisions including notices, severability, stamp duty, entire agreement, and governing law

• Schedules covering trustees, shareholdings, related agreements, and sample option notices