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Frequently Asked Questions
Is life insurance mandatory?
Not necessarily. However, many companies use it as a source of liquidity because it can provide funds in the event of a covered event, subject to eligibility and contract terms.
Can one partner buy out the other's share without affecting the business's cash flow?
The goal of the agreement is to ensure the acquisition is clearly planned and executed. Its impact will depend on the defined structure, valuation, and financing strategy. Therefore, it is designed in advance and reviewed periodically.
Protect the future of your business and your family with a clear, financed agreement. Book your professional consultation today.
Business Continuity When a Partner Can No Longer Continue. A Purchase and Sale Agreement is a legal and operational mechanism to establish, in advance, how a partner's stake will be handled in the event of death, retirement, or departure. When structured correctly, it can help protect the company's operations, valuation, and stability, reducing uncertainty during critical times.
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**Educational information only. Not legal or tax advice. The agreement should be drafted and reviewed by a licensed attorney. Any insurance is subject to eligibility, terms, and approval by the insurer.**
Who is it for?
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Companies with two or more active partners (including professional partnerships).
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Medical clinics, practice groups, laboratories, and healthcare centers.
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Law firms, consultancies, and firms with strategic partners.
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Family businesses seeking a smooth transition.
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Investors or partners who wish to define clear rules to protect their stake.
Buy-Sale Agreement
How does it work?
The partners agree in writing on what will happen if a partner dies, retires, or leaves the business, including how their stake will be valued and who will be able to purchase it. In many cases, life insurance is used as a source of liquidity: upon the death of the insured partner, the death benefit (according to the terms of the contract) can be used to purchase the stake without having to sell assets or interrupt operations.
Important: If coverage for scenarios such as disability is desired, additional planning or different products may be required; each case is evaluated individually.
Key Benefits
It can be structured with financing through insurance (for example, life insurance), depending on the design of the agreement.
It helps maintain operational continuity by establishing a transition plan.
Define a method for determining valuation and purchase/sale conditions.
It can provide liquidity to execute the purchase of participation in the event of a covered event (according to the policy/contract).
Avoid legal or family disputes in the event of death.
Stages of the Process
Initial assessment: corporate structure, clinical/operational roles, exposure, and continuity objectives.
Assessment and method: definition of method to assess participation (with support from professionals as applicable).
Legal documentation: drafting and review of the agreement with a licensed lawyer (coordination with their team).
Financing strategy: selection of alternatives (including insurance) based on eligibility and objectives
Periodic review: update for changes in revenue, partners, expansion or restructuring.