How Does An Entity Purchase Agreement Work?

Posted by Winifred "Wini" Cannon | Sep 16, 2020 | 0 Comments

Entity Purchase Agreements can be used as vehicles to ensure the continuity of your business. Here is how it works:

The entity would purchase life insurance policies on all of the owners, and thereby the entity would be both the owner of the policy and the beneficiary. In other words, that would be an expense to your company, the LLC, the C Corp, or the S Corp, however you were born.

But when the person died, the company would buy out the deceased partner's share and the business would continue with the remaining partners as the successor in interest.

About the Author

Winifred "Wini" Cannon

Winifred “Wini” Cannon knows how business owners may be impacted when retirement, incapacity, or death occurs without a good plan in place. One example that is very common is in the instance where one partner dies leaving the other trying to stay in business complicated by the...

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