Buy-Sell Agreement Template (US)
Updated on September 24, 2026
A buy-sell agreement is a standing ownership-control document. It is not the same as a buyout agreement signed after one owner is already leaving. The Jotform source captures death, disability, retirement and transfer restrictions, but it is too corporation-specific and too light on valuation, funding, tax, securities, family consent and LLC/partnership variants.
This US master is built for closely held companies, LLCs and partnerships that want a rulebook before the crisis. It defines permitted transfers, right of first refusal, mandatory sale triggers, optional call rights, valuation method, payment terms, insurance funding, transfer legends, spouse consent, tax caveats and dispute process. The goal is to prevent an unwanted owner, frozen estate, divorce creditor or deadlock from controlling the next chapter.
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Buy-Sell Agreement
- Effective date:
- Company:
- Entity type:
- Covered owners:
The company and covered owners enter into this agreement to restrict transfers of ownership interests and to create purchase rights or obligations when specified trigger events occur.
1. Covered interests
Covered interests are: . Each owner agrees that no transfer is effective unless permitted by this agreement and reflected in the company records.
2. Permitted and restricted transfers
Transfers for estate planning, affiliates or family trusts are permitted only if the transferee signs an agreement to be bound. All other voluntary transfers require the notice, offer and consent process stated in this agreement.
3. Trigger events
Trigger events include: . When a trigger occurs, the affected owner or representative must give prompt written notice and provide documents reasonably needed to confirm the event.
4. Purchase structure
The purchase structure is . The company, the remaining owners, or both will have the rights and obligations stated in the purchase notice and closing schedule.
5. Valuation
Value will be determined as follows: . If the selected method cannot be completed, the parties will use an independent appraiser or accountant selected under the dispute process in this agreement.
6. Payment
Payment terms are: . Deferred amounts must be evidenced by a note and any agreed security, guarantee, default, cure, acceleration and prepayment terms.
7. Insurance funding
Insurance funding terms are: . The agreement should identify policy owner, insured person, beneficiary, premium responsibility and how proceeds are credited against the purchase price.
8. Records and transfer legend
will update its stock ledger, membership ledger, partnership books, cap table, certificates or other ownership records to reflect this agreement and any transfer restriction.
9. Spouse consent
Each signing spouse or domestic partner consents to the transfer restrictions and agrees not to assert a marital, community-property or similar claim inconsistent with this agreement to the extent permitted by law.
10. Governing law
This agreement is governed by and must be interpreted together with the company governing documents. If a conflict cannot be reconciled, the parties must amend the documents before relying on the conflicting term.
Company
Date signed:
Covered owners
Date signed:
A buy-sell agreement controls future triggers
The document should be signed while the owners are aligned, not after a death, disability, divorce, bankruptcy or firing has created pressure. It decides who may buy, who must sell, how price is set and how payment happens when a trigger occurs.
This template treats death, disability, retirement, termination of employment, voluntary transfer, involuntary transfer, divorce, bankruptcy, deadlock and material breach as configurable trigger events. It separates mandatory purchases from optional purchases so the parties can decide when the company must act and when it only has a right.
Use the right entity vocabulary
Jotform drafts only for shareholders and shares. Many small businesses are LLCs or partnerships. A member interest, partnership interest, economic right, voting right and corporate share can transfer differently under governing documents and state law.
The master uses ownership-interest language and lets the user choose corporation, LLC or partnership framing. It also tells users to check the operating agreement, partnership agreement, bylaws and existing shareholder agreement so the buy-sell agreement does not conflict with documents already in force.
Valuation needs a current mechanism
Annual agreed value can work only if the owners actually update it. If they do not, the document needs a fallback: independent appraisal, formula value, book value adjustment, EBITDA multiple, insurance proceeds floor, or accountant determination. A stale number is a litigation seed.
The template asks for valuation date, method, appraiser selection, discounts, debt treatment, control premium, tax-affecting assumptions and dispute mechanics. That is deliberately more detailed than a blank fair-market-value line.
Funding and payment terms determine whether the promise works
A purchase obligation with no funding plan may bankrupt the company or leave the seller estate unpaid. Life insurance, disability insurance, installment notes, escrow, company redemption, cross-purchase, hybrid structures and security interests all allocate risk differently.
This agreement does not choose tax structure for the parties, but it makes the payment mechanics visible. It asks who buys, how much is paid at closing, maximum installment term, interest, collateral, acceleration and whether insurance proceeds reduce or fund the price.
Securities and family-law issues are not optional footnotes
Closely held ownership interests can still be securities. SEC Rule 144 is mainly a public-resale safe harbor for restricted and control securities, but its existence is a useful reminder that transfer restrictions, legends and issuer consent can matter. State securities and company-law rules may also apply.
Family and creditor issues also matter. A divorce, bankruptcy, death or community-property claim can put someone else in the ownership chain. This template includes spouse/community-property consent as an optional signing block and requires involuntary-transfer notice before a third party gains control rights.
Buy-sell agreement clause guide
- Covered owners and interests
- Names the company, owners and ownership interests covered by the agreement.
- Permitted transfers
- Allows estate-planning or affiliate transfers only if the transferee remains bound.
- Right of first refusal
- Requires an owner to offer interests to the company or other owners before selling to outsiders.
- Mandatory trigger events
- Covers death, disability, bankruptcy, divorce, termination, retirement, deadlock or breach.
- Valuation method
- Sets date, formula, appraiser, discounts, financial statements and dispute process.
- Purchase structure
- Chooses company redemption, cross-purchase, hybrid or another purchase route.
- Payment and security
- Defines closing payment, installments, interest, collateral and acceleration.
- Insurance funding
- Records policies, ownership, beneficiary, premium duties and how proceeds are credited.
- Transfer legend and records
- Requires company ledgers, certificates or cap-table records to reflect restrictions.
- Spouse and estate consent
- Reduces later claims by spouses, estates or personal representatives where appropriate.
US buy-sell checklist
A buy-sell agreement is deeply dependent on entity type, tax structure and existing documents. These checks should be completed before signing.
Align with the governing documents
Review operating agreements, partnership agreements, bylaws, articles, shareholder agreements, loan covenants and investor rights before drafting transfer restrictions.
Choose the tax structure deliberately
Company redemption, cross-purchase and hybrid arrangements can have different tax and basis effects. The agreement should not pick a structure accidentally.
Review securities-transfer limits
SEC guidance explains that restricted and control securities can require exemptions, holding-period analysis and restrictive legends for public resale. Private-company transfers also need state and document review.
SEC Rule 144 overviewUse a current valuation method
If owners use annual agreed value, calendar a required update and include a fallback appraisal method when no current value exists.
Confirm insurance ownership and tax treatment
Insurance-funded buy-sell arrangements should be reviewed for ownership, beneficiary, premium payments, transfer-for-value risk and tax reporting.
Include spouse or community-property consent where needed
A spouse or domestic partner may need to sign to avoid later marital-property claims in some states.
Keep company records consistent
The stock ledger, membership ledger, cap table, certificates, transfer legends and minute book should match the restriction.
How to complete this buy-sell agreement
- List covered owners. Add each shareholder, member or partner and the interest covered by the agreement.
- Choose trigger events. Select death, disability, divorce, bankruptcy, retirement, termination, voluntary sale, deadlock or breach triggers.
- Pick purchase structure. Decide whether the company, other owners or both have the purchase obligation or option.
- Set valuation. Choose annual agreed value, formula, appraisal or accountant determination and include a fallback.
- Plan funding. Add insurance, installment notes, collateral, closing payment, interest and acceleration terms.
- Update records. Add transfer legends, cap-table notes, company approvals and spouse consents before storing the signed copy.
Frequently asked questions
Is a buy-sell agreement the same as a buyout agreement?
No. A buy-sell agreement is signed in advance to control future transfer events. A buyout agreement is usually signed when a specific owner is already selling or leaving.
Can LLC members use this?
Yes, if the language is adapted to membership interests and the operating agreement. The template uses ownership-interest language, but LLC law and the existing operating agreement still control many transfer issues.
What triggers should be included?
Common triggers include death, disability, divorce, bankruptcy, retirement, termination of employment, voluntary transfer, involuntary transfer, deadlock and material breach. Choose only the triggers that fit the company.
How should the price be calculated?
Use a current annual value, formula, independent appraisal or accountant determination. Include a fallback if the annual value is stale or the owners cannot agree.
Should the company buy the interest or should owners buy it?
That is a tax, funding and control decision. Company redemption, cross-purchase and hybrid structures can produce different outcomes, so do not choose by habit.
Does life insurance solve everything?
No. Insurance can fund a death buyout, but the agreement still needs policy ownership, beneficiary, premium duties, proceeds credit, insufficient-proceeds treatment and tax review.
Do spouses need to sign?
Sometimes. In community-property or family-owned settings, spouse consent can reduce later claims. The template includes an optional consent block, but state law should be checked.
Can an owner sell to a family trust?
Only if the agreement permits it and the transferee agrees to be bound. Estate-planning transfers should not become loopholes around ownership restrictions.
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Disclaimer
This template and guide are general information only, not legal, tax, accounting, securities, real-estate, employment, competition, lending, or regulatory advice. No attorney has reviewed your facts. Check current federal, state, local and industry rules before signing.
