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A|E Consulting Services, Inc.

Buy/Sell Agreements

Buy Sell AgreementsIf you have a Buy/Sell Agreement and it has not been reviewed and updated within the past five years, then it is probably out of date with potentially serious flaws.   As an owner or a potential owner of a professional service company, your ownership rights and interests must be protected.   A well-designed Buy/Sell will provide flexibility…presenting owners with options, but also incorporating self-executing features for critical redemption obligations.   A well-executed Buy/Sell Agreement will provide a fair balance between providing for existing owners and attracting new owners.

A good Buy/Sell Agreement will:

  • Provide for the continued success of the firm.
  • Attract talent and interest in ownership.
  • Establish a means of determining ownership value.
  • Create a market where ownership can be issued and redeemed.
  • Achieve a balance between retiring owners getting an attractive redemption value, and cash flow constraints that are typical of new owners.

A/E Consulting Services assists architectural, engineering and related firms in reviewing existing agreements and documents, and with making recommendations on what should be amended to make a better document.   We also assist firms in drafting initial Buy/Sell agreements.   A/E Consulting Services assists clients to address the critical issues for a fair and equitable agreement that properly covers:

  • Non-competition and non-stealing of employees.
  • Bank guarantees and subordination agreements.
  • Reasonable look-back arrangements for subsequent third party sales.
  • How a fair stock sales and redemption price will be determined.
  • Detailing rights and responsibilities of shareholders.
  • How to determine who will receive offers to purchase stock.

The actual development of a Buy-Sell Agreement is usually one of the final steps in developing a viable ownership transition plan.