How to Avoid Problems with the Definition of “Disability” in Buy-Sell Agreements

A Valuation/Business Lesson on Video

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Disability is one of the common “trigger events” that give rise to the operation of buy-sell agreements.  If an owner becomes disabled, the other owners (or the company) may have the right to acquire the disabled owner’s shares or interests.

This raises the question: What is meant by the term “disability?”

In the following video, I briefly address the definition of disability in a real buy-sell agreement, explain why it will not work if there is a trigger event, and offer an objective suggestion to avoid problems with the definition.

Be well,

Chris

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