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entity buy-sell agreement

An entity buy-sell agreement is an agreement between a partnership or a corporation, as an entity, and the owners (partners or stockholders) that, upon the death of an owner, the company (partnership) will purchase the deceased owner's share of the business.

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The ownership of the company is still maintained by the surviving owners. The result is that the survivors each have a larger share of the company, and the deceased owner's estate is provided with cash it will need.

Related Terms

A buy/sell agreement refers to a contract among members of a firm that provides for the...