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Mark W Petro
mark.petro@lakelandinvestors.com
 
 




Family Business Succession Planning

 

Overview of Buy-Sell Agreement Forms

Agreement formBuyerWorks well withUnsuitable for
Wait and seeBusiness entity, co-owner, or bothBusiness with two or more ownersSole proprietor and single-shareholder corporation
Trusteed cross purchase

Co-owner

Transaction overseen by trustee

Business with two or more owners

Simplifies plan when large number of owners

Sole proprietor and single-shareholder corporation

Entity purchase (stock redemption)Business entity Business with two or more ownersMost expensive type
Section 302 stock redemption*Business entityBusiness with two or more ownersSole proprietor and single-shareholder corporation
Section 303 stock redemption*Business entityBusiness with two or more owners, especially family businessSole proprietor and single-shareholder corporation
Reverse Section 303 stock redemption*Business entityBusiness with two or more owners, especially family businessSole proprietor and single- shareholder corporation
Cross purchase (crisscross) agreement

Co-owner

Business with two or more owners

Sole proprietor and single-shareholder corporation

Large number of owners (gets complicated with four or more)

Option plan

Business entity, co-owner, or any eligible third party

Sale not guaranteed

Business with any number of owners, including sole proprietorship and single-shareholder corporation

Any scenario where guaranteed sale is needed

One-way buy-sellBusiness entity, co-owner, or any eligible third party Business with any number of owners, including sole proprietorship and single-shareholder corporation Sole proprietor with no willing buyer

*Section refers to an Internal Revenue Code Section.



Investments and advisory services are offered through Lakeland Investor Services, Inc., a Registered Investment Advisor. 11873 Oakland Beach Road, Conneaut Lake, PA 16316, (814) 382-6681. Insurance services offered through Lakeland Insurance Services, LLC and Mark W. Petro, an agent licensed in PA, FL, NJ, OH and VA. Neither Lakeland Investor Services, Inc. nor its agents and representatives can provide tax, legal or accounting advice. Clients should consult their own attorney or tax advisor about their specific circumstances.

 

This communication is strictly intended for individuals residing in the state(s) of FL, NJ, OH, PA and VA. No offers may be made or accepted from any resident outside the specific states referenced.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2022.