buy-sell agreement
Reviewed by Owen Hathaway, AttorneyUpdated June 4, 2026A contract among co-owners setting what happens to an owner's share on death, disability, divorce, or departure: who can buy, at what price, and how it is paid.
A buy-sell agreement is a contract among the owners of a business (or between owners and the entity) that governs the transfer of an ownership interest upon triggering events such as death, disability, divorce, retirement, or a desire to sell. It sets who may buy, how the price is determined, and how the purchase is funded, often with life or disability insurance.
It is the business equivalent of an estate plan: without one, or the provisions of on in an operating agreement, an owner's share can pass to heirs or outsiders the remaining owners never chose, creating conflict and uncertainty. It pairs naturally with succession planning for family-owned businesses.
Enforced as a contract in both Colorado and Wyoming. Valuation methods and funding should be reviewed periodically and coordinated with each owner's estate plan so business interests pass as intended.