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PrintValuing the Interest
In a buy-sell agreement, which is an important part of properly establishing your business entity, a method for valuing the business interests must be written into the document.
After all, in the world of commerce, everything has a price. The problem is, most people have a hard time agreeing on that price. What is valuable to one person may have little value to another.
In addition, a business is comprised of any number of variables, each possessing its own values. As with any major purchase, a deal usually has to be negotiated to reach the final price.
To simplify the buy-sell process and ensure fairness for all owners, the buy-sell agreement should specify how the owners' interests are to be valued. Essentially, there are three choices:
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