As a business owner, it`s important to have a buy-sell agreement in place. This agreement outlines what will happen to the business should one of the owners pass away, become disabled, or otherwise leave the company. Within the buy-sell agreement, there are triggering events that will « trigger » the agreement to take effect.

Triggering events are specific events that cause the buy-sell agreement to come into play. These events can be divided into two categories: voluntary and involuntary.

Voluntary triggering events are events in which an owner chooses to leave the company. These events include retirement, resignation, or a desire to sell their shares. In these cases, the buy-sell agreement will typically outline how the remaining owners can buy the departing owner`s shares.

Involuntary triggering events are events that occur outside of the owner`s control. These events include death, disability, and bankruptcy. In these cases, the buy-sell agreement will typically outline the process for the remaining owners to buy the affected owner`s shares.

It`s important to note that triggering events are not limited to the events mentioned above. A buy-sell agreement can also include other events that may trigger the agreement to take effect, such as divorce or breach of contract.

When drafting a buy-sell agreement, it`s important to consider all possible triggering events and their potential impact on the business. By doing so, the agreement can provide a clear roadmap for the future of the company should one of these events occur.

In summary, a buy-sell agreement is a critical component of any business. Triggering events within the agreement ensure that the business`s future is protected in the face of unforeseeable events. As a business owner, it`s important to work with experienced professionals to create a buy-sell agreement that is tailored to your unique needs and circumstances.