what is the benefit of a buy and sell agreement 
a buy and sell agreement assures a smooth transition of ownership and business continuity in the event of a departure of a partner or large equity owner the agreement is a legally binding contract that establishes how the departing owners shares will be obtained by the remaining partners without such an agreement there can be legal battles and contestation for instance if a partner dies without an agreement their shares may be passed automatically to their spouse who may decide to keep them or the spouse may want to sell them but the remaining partners do not have the funds available to buy the shares the bottom linebusiness continuity is important especially when there are multiple partners or important equity holders involved in the running of a business a buy and sell agreement buy sell agreement is a legal remedy for establishing a clear plan of how to distribute the shares of a departed or deceased partner to the remaining ones in the case of a death life insurance policies are used to fund the buyout of shares from the deceased s estate 