What is the main purpose of a Buy-Sell Agreement?

The main purpose of a Buy-Sell Agreement is to establish the purchase price and conditions under which a deceased business partner's share can be sold to the surviving partners or the business itself. This legal contract facilitates a smooth transition of ownership by defining how the deceased partner's interest in the business will be valued and transferred, thus helping to prevent disputes among the remaining partners and ensuring financial stability for the business during a difficult time.

By clearly laying out the procedures for ownership transfer, including the agreed-upon price, the agreement protects all parties involved and provides a level of financial certainty that can be crucial for maintaining business operations after a partner's death. Such arrangements can also minimize the risk of outside parties acquiring a stake in the business unexpectedly, preserving the original partnership structure and vision.

The other considerations in the question, such as increasing business revenue or detailing employee responsibilities, do not align with the specific intent of a Buy-Sell Agreement. Similarly, providing benefits for employees is not relevant to the main purpose of ensuring fair treatment of partners’ shares upon their death.