Life brings about a series of unanticipated events and any business partnership should be protected from what might happen when an owner retires, gets divorced, goes bankrupt, becomes disabled, or passes away. Every co-owned business needs a buy-sell agreement when the business is formed. Basically a buy-sell agreement reduces conflict when the time for a buyout arises.
A properly structured and funded buy-sell agreement can ensure the smooth transition and continuation of your business. It can help to avoid conflicts and power struggles among partners/owners when a co-owner wants to leave the company and it also protects the owner who is remaining in business. Agreeing on a way to value the company in advance gives the owners a chance to discuss and vote on how a reasonable price for the company should be calculated.