Does Your Business Pass the Test?
A strong buy-sell agreement can protect your company, your family, and your future. Take this quick assessment to see where your succession plan stands.
Buy-Sell Agreement Scorecard
How prepared is your company?
Use this scorecard as a quick succession-planning checkup for your business. It helps you see whether your current buy-sell agreement is clearly written, properly funded, and ready to support a smooth ownership transition if a triggering event occurs. Your overall score gives you a practical read on where your agreement is strong and where it may need attention. (Please note: This scorecard doesn’t replace a buy-sell review. Regardless of your total score, a buy-sell review is highly recommended.)
1.Do you have a written buy-sell agreement?
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2.Is your buy-sell agreement funded?
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3.Have you ever had an informal or formal business valuation completed?
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4.Does your buy-sell agreement mention disability?
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5.If one of the owners becomes disabled, can the business afford to continue to pay the owner’s salary and hire a replacement?
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6.Is there a definition of disability within the agreement?
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7.Does your agreement have a mechanism or formula to determine the value of the company?
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8.Does your buy-sell agreement mention divorce?
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9.Does your agreement contain a spousal-consent clause?
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10.Are your buy-sell triggers mandatory?
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11.If there is a valuation dispute is the language suggesting mediation and or arbitration?
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12.If you pass away tomorrow will your co-owners look after your family?
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13.If you pass away tomorrow will your family receive a fair price for your share of the business?
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Gauging your score:
100–85 = Good shape
84–70 = Needs work
69 or below = Address concerns soon
Your score:0
Based on the color your score yielded, it may be time to take action.
Do You Know What Your Business is Worth?
If you scored low... it may be time for a complimentary review.
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