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Free Buy-Sell Agreement Template

Protect your business from ownership disputes with a comprehensive buy-sell agreement. Define trigger events, valuation methods, funding mechanisms, and transfer restrictions with our professional United States template — trusted by American business owners.

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BUY-SELL AGREEMENT
Pacific Ventures Group LLC · LLC · State Of Formation: California
OWNER 1
Robert Chen
742 Oak Avenue, Palo Alto, CA 94301
OWNER 2
Lisa Park
388 Elm Street, Mountain View, CA 94041
Pacific Ventures Group LLC
Limited Liability Company (LLC) | Cross-Purchase | March 12, 2026
This Buy-Sell Agreement (this "Agreement") is entered into as of March 12, 2026, by and between Robert Chen, Managing Member (email robert.chen@pacificventures.com) and Lisa Park, Member (email lisa.park@pacificventures.com) (collectively, the "Owners"), the owners of all issued and outstanding ownership interests in Pacific Ventures Group LLC, a Limited Liability Company (LLC) organized under the laws of the State of California, with its principal office located at 1500 Market Street, Suite 300, San Francisco, CA 94103. The Owners' spouses, Grace Chen and Daniel Park, join this Agreement solely to give the community-property consent set forth below and sign in that capacity.
1.
RECITALS
WHEREAS, Pacific Ventures Group LLC (the "Company") is a Limited Liability Company (LLC) organized and existing under the laws of the State of California, whose internal affairs are governed by the law of that state wherever the Company operates;
WHEREAS, the undersigned parties are the owners of all the issued and outstanding ownership interests in the Company;
WHEREAS, the Owners desire to restrict the transfer of their ownership interests, to provide for the orderly transition of ownership upon certain trigger events, and to establish a fair method for valuing said interests (consistent with the valuation principles of IRS Revenue Ruling 59-60 and the requirements of I.R.C. §2703(b) for estate-tax effectiveness);
NOW, THEREFORE, in consideration of the mutual covenants herein, and for other good and valuable consideration, the Owners agree as follows.
2.
DEFINITIONS
For purposes of this Agreement:
  • "Agreement" means this Buy-Sell Agreement, including any amendments or supplements.
  • "Company" means Pacific Ventures Group LLC, a Limited Liability Company (LLC) organized under the laws of California.
  • "Ownership Interest" means an owner's percentage ownership in the Company, including all economic and governance rights, together with any community-property interest of an Owner's spouse therein.
  • "Trigger Event" means any event specified in this Agreement that activates the buy-sell obligations, including death, disability, retirement, voluntary withdrawal, divorce.
  • "Purchase Price" means the price determined under the valuation provisions of this Agreement.
  • "Departing Owner" means the Owner whose Ownership Interest is subject to purchase upon a Trigger Event; "Remaining Owner(s)" means the other Owner(s).
3.
OWNERSHIP STRUCTURE
The current ownership structure of the Company is as follows:
Robert Chen — 60% — Managing Member
Lisa Park — 40% — Member
The Owners collectively hold one hundred percent (100%) of the outstanding ownership interests. Each Owner represents that their interest is free and clear of all liens, encumbrances, and claims, and has been duly issued and is fully paid and nonassessable under the law of the State of California.
4.
TRIGGER EVENTS
Upon the occurrence of any of the following Trigger Events, the buy-sell obligations of this Agreement shall be activated:
  • Death: Upon the death of any Owner, the estate or legal representative of the deceased Owner shall be obligated to sell, and the purchasing party shall be obligated to purchase, the deceased Owner's Ownership Interest.
  • Disability: If any Owner becomes permanently disabled as defined in this Agreement, the disabled Owner (or their legal representative) shall be obligated to sell their Ownership Interest.
  • Retirement: Upon the retirement of any Owner from active participation in the Company, such Owner shall offer their Ownership Interest for sale.
  • Voluntary Withdrawal: Any Owner who voluntarily withdraws or desires to sell shall first offer their interest to the Remaining Owner(s) in accordance with this Agreement.
  • Divorce: If any Owner's Ownership Interest becomes subject to division in divorce proceedings, the affected Owner shall be required to sell (or re-acquire) the interest before any court-ordered division places equity in the hands of a non-Owner — particularly important in a community-property state, where the spouse's community-property half exists by operation of law.
Under this Cross-Purchase arrangement, the Remaining Owner(s) shall individually purchase the Departing Owner's interest in proportion to their respective ownership percentages, unless otherwise agreed in writing. Tax treatment follows I.R.C. §1001 (sale or exchange) and, on death, I.R.C. §1014 (stepped-up basis); the purchasing Owners also receive a basis increase in the acquired interest — an advantage entity redemptions do not provide.
5.
SPOUSAL CONSENT AND COMMUNITY PROPERTY
The State of California is a community-property jurisdiction (Cal. Fam. Code §760 (community-property presumption)): an Ownership Interest acquired during marriage is presumptively community property, and the non-titled spouse holds a present, vested interest in it by operation of law. WITHOUT the spouse's joinder, the buy-sell obligations of this Agreement may be unenforceable against that spouse's share — most acutely on divorce or on the death of the non-owner spouse.
Accordingly: Grace Chen, spouse of Robert Chen, and Daniel Park, spouse of Lisa Park, each (i) consents to all terms of this Agreement, including the transfer restrictions, valuation method, and purchase obligations; (ii) agrees that any community property interest they may have in an Ownership Interest is fully subject to this Agreement; (iii) agrees that on dissolution of marriage or death, any interest awarded to or held by them is subject to the same mandatory sale provisions at the same Purchase Price; and (iv) appoints their Owner spouse to act on their behalf in any transaction completed in compliance with this Agreement.
Each spouse acknowledges having had the opportunity to obtain independent counsel before signing. Each Owner shall obtain an equivalent consent from any future spouse within sixty (60) days of marriage.
6.
RIGHT OF FIRST REFUSAL
Prior to any voluntary transfer of an Ownership Interest to a third party, the Departing Owner ("Offering Owner") shall first deliver a written notice ("Offer Notice") to the Remaining Owner(s) and the Company, specifying the terms, conditions, and price of the proposed transfer.
The Remaining Owner(s) have thirty (30) days from receipt to exercise their right of first refusal on the same terms; multiple electing Owners purchase pro rata. If the right is not exercised within thirty (30) days, the Offering Owner may complete the transfer within sixty (60) days on terms no more favorable to the third party than those noticed.
These restrictions are imposed pursuant to Cal. Corp. Code §§204(b), 418 (certificate notation) and shall be noted conspicuously on any certificate or instrument evidencing the Ownership Interest.
7.
VALUATION METHOD
The Purchase Price for any Ownership Interest subject to purchase under this Agreement shall be determined as follows (in accordance with the fair-market-value factors of IRS Revenue Ruling 59-60 and, for estate and gift tax purposes, I.R.C. §§2031 and 2703):
Independent Appraisal: The value of the Company shall be determined by a qualified, independent business appraiser, conducted annually, reflecting the fair market value of the Company as a going concern. The appraiser (qualified within the meaning of I.R.C. §170(f)(11)(E)) shall be selected by mutual agreement of the Owners; the cost is borne by the Company. The Purchase Price equals the appraised value multiplied by the Departing Owner's ownership percentage.
8.
PURCHASE PRICE DETERMINATION
The Purchase Price determined under this Agreement shall be final and binding upon all parties — and shall be treated as controlling evidence of fair market value for transfer-tax purposes to the extent this Agreement satisfies the three-pronged test of I.R.C. §2703(b) (bona fide business arrangement; not a device to transfer wealth to family members for less than full consideration; terms comparable to arm's-length arrangements) — subject to the following:
  • The valuation date is the date of the Trigger Event, or the most recent valuation date if a current appraisal or fixed price exists.
  • Adjustments shall be made for distributions, capital contributions, or material changes in financial condition between the valuation date and closing.
  • Price disputes are resolved under the dispute-resolution provisions of this Agreement.
9.
FUNDING MECHANISM
Funding Mechanism: Life Insurance.
The parties shall procure and maintain term life insurance on the life of each Owner to fund the purchase obligation on death. Proceeds generally qualify for the income-tax exclusion of I.R.C. §101(a), subject to the transfer-for-value rule of §101(a)(2) (note the partner/partnership exceptions of §101(a)(2)(B)) and, for employer-owned policies, the notice-and-consent requirements of §101(j). Each policy shall have a face value of no less than 500,000.00 USD per Owner.
Estate-tax structuring — Connelly v. United States, 602 U.S. 257 (2024): The Supreme Court held that life-insurance proceeds received by a company to fund a REDEMPTION increase the company's value for federal estate-tax purposes — the redemption obligation is NOT an offsetting liability — inflating the taxable value of the deceased owner's interest. The holding extends to closely held corporations, LLCs, and partnerships alike. Under this CROSS-PURCHASE structure, each policy is owned by (and payable to) the co-Owners individually rather than the Company, so the Connelly inclusion does not arise — one of the principal reasons this structure was selected. The Owners shall keep policy ownership OUTSIDE the Company; routing the policies through the Company would re-create the redemption-inclusion problem.
The policy owner shall pay all premiums and keep each policy in force during the term of this Agreement, and shall promptly notify all parties of any lapse or cancellation.
Security: The purchase obligation shall be secured by a promissory note executed by the purchasing party. Any promissory note is a negotiable instrument governed by UCC Article 3; any pledge of an Ownership Interest shall be perfected under UCC Articles 8 and 9.
10.
PAYMENT TERMS
Closing of any purchase and sale under this Agreement shall occur within sixty (60) days following the Trigger Event, or such other period as the parties agree in writing. Transfers of certificated and uncertificated interests are effected in accordance with UCC Article 8.
At closing, the Departing Owner (or their estate) shall deliver (a) all certificates or instruments evidencing the interest, duly endorsed; (b) all documents necessary to effect the transfer under the Company's governing documents; and (c) such other documents as reasonably requested. The purchasing party shall deliver the Purchase Price or evidence of the agreed payment arrangements.
Redemption legality (California): Any purchase by the Company itself is subject to the distribution test of Cal. Corp. Code §§500-501: a California corporation may redeem shares only if retained earnings cover the distribution, or the corporation satisfies the post-distribution asset/liability ratio test — and it must remain able to pay its debts as they fall due. If the test temporarily blocks a redemption, the purchase obligation converts to a cross-purchase by the Remaining Owner(s) or is deferred (with interest at the applicable federal rate) until the Company may lawfully complete it, whichever the Remaining Owner(s) elect.
11.
TRANSFER RESTRICTIONS
No owner may transfer, sell, pledge, or otherwise dispose of any ownership interest without the prior written approval of the Board of Managers/Directors.
These restrictions are imposed pursuant to Cal. Corp. Code §§204(b), 418 (certificate notation) and shall be noted conspicuously on any certificate, instrument, or ledger entry evidencing the Ownership Interest, as required to bind transferees. Any purported transfer in violation of this Section is null and void ab initio.
12.
TAG-ALONG AND DRAG-ALONG RIGHTS
Tag-Along Rights: If any Owner receives and intends to accept a bona fide third-party offer for all or part of their Ownership Interest, the Remaining Owner(s) may participate in the sale on the same terms, pro rata by ownership percentage.
Drag-Along Rights: If Owners holding more than fifty percent (50%) of the total Ownership Interests approve a sale of the Company or all of its assets to a third party, the remaining Owner(s) shall participate on the same terms and conditions.
13.
NON-COMPETE
Upon the sale or transfer of a Departing Owner's Ownership Interest pursuant to this Agreement, the Departing Owner agrees that for a period of 2 year(s) following the closing date, the Departing Owner shall not, directly or indirectly:
  • Own, manage, operate, control, or participate in any business competing with the Company within the geographic area in which the Company conducts business;
  • Solicit any customer, client, or account of the Company;
  • Divert any business opportunity from the Company.
State enforceability (California): This covenant is given in connection with the SALE of the Departing Owner's entire interest and its goodwill — the classic context preserved by Cal. Bus. and Prof. Code §§16601 (goodwill sale), 16602 (partnership dissolution), 16602.5 (LLC dissolution). California recognizes narrow exceptions: (i) §16601 — sale of all or substantially all of the goodwill of a business; (ii) §16602 — dissolution of or dissociation from a partnership; (iii) §16602.5 — dissolution of or termination of interest in an LLC. The restraint must be tied to the business sold and limited to the geographic area where the business was operating. The FTC Non-Compete Rule — which itself contained a sale-of-business exception — was vacated in Ryan, LLC v. FTC (N.D. Tex. 2024) and removed from 16 C.F.R. Part 910 effective February 12, 2026; no federal rule currently bars this covenant.
14.
NON-SOLICITATION
For a period of 2 year(s) following the closing of a buyout transaction under this Agreement, the Departing Owner shall not, directly or indirectly:
  • Solicit, recruit, hire, or attempt to hire any employee, officer, or independent contractor of the Company;
  • Encourage any employee or contractor to leave the Company;
  • Interfere with the Company's relationships with employees, contractors, suppliers, or vendors.
15.
DISABILITY PROVISIONS
Definition of Disability: An Owner is "disabled" if unable to perform the essential functions of their role within the Company for a continuous period of one hundred eighty (180) consecutive days.
Buyout Timing: Upon a determination of disability, the buy-sell obligations shall be activated six (6) months following the determination of disability.
The disabled Owner (or their representative) shall cooperate in the transition of management and provide access to all Company records necessary for continued operation. Medical examinations and records are handled in compliance with the Americans with Disabilities Act (42 U.S.C. §12101 et seq.) and HIPAA privacy standards (45 C.F.R. Parts 160, 164).
16.
DISPUTE RESOLUTION
Any dispute, controversy, or claim arising out of or relating to this Agreement, including its interpretation, breach, or validity, shall be resolved by mediation, followed by binding arbitration if mediation is unsuccessful. The parties shall first attempt good-faith mediation before a mutually agreed mediator; if unsuccessful within thirty (30) days, the dispute shall be submitted to binding arbitration under the rules of the American Arbitration Association (AAA).
Any arbitration award is enforceable under the Federal Arbitration Act, 9 U.S.C. §§1-16. The prevailing party is entitled to reasonable attorneys' fees and costs, to the extent permitted by applicable law.
17.
AMENDMENT
This Agreement may be amended or modified only by the unanimous written consent of all Owners. Any amendment shall be in writing, specify the provisions amended, and state its effective date; material amendments to the purchase obligations also require re-execution of the spousal consents.
18.
GOVERNING LAW
This Agreement and the internal affairs of the Company shall be governed by and construed in accordance with the laws of the State of California, without regard to conflict-of-laws principles. Any legal action arising under this Agreement shall be brought exclusively in the state or federal courts located in the State of California, and the parties consent to personal jurisdiction and venue therein. For matters governed by federal securities law, this Agreement shall be construed consistently with the Securities Act of 1933, 15 U.S.C. §77a et seq., and the Securities Exchange Act of 1934.
19.
ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, oral or written. No amendment is valid unless made in writing and signed by the required parties as set forth herein.
20.
SEVERABILITY
If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it enforceable, or severed if modification is not possible. The remaining provisions continue in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Buy-Sell Agreement as of the date first written above.
OWNER 1
Robert Chen
Managing Member
Date: ____________________
OWNER 2
Lisa Park
Member
Date: ____________________
SPOUSE OF OWNER 1
Grace Chen
Consenting Spouse
Date: ____________________
SPOUSE OF OWNER 2
Daniel Park
Consenting Spouse
Date: ____________________

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What Is a Buy-Sell Agreement?

A buy-sell agreement is a legally binding contract used throughout the United States between co-owners of a business that establishes what happens to ownership interests when a triggering event occurs. These events typically include death, disability, retirement, or voluntary withdrawal of an owner. The agreement creates a predetermined framework that protects both the departing owner (or their estate) and the remaining owners by defining clear rules for ownership transitions.

Buy-sell agreements are used by LLCs, corporations, partnerships, and S-Corps across the United States. They serve as a form of business succession planning by ensuring that ownership transfers happen in an orderly manner, at a fair price, and without disrupting daily operations. Without a buy-sell agreement, the departure of an owner can lead to disputes, forced liquidation, or unwanted outside involvement in the business.

A well-drafted American buy-sell agreement addresses three core questions: who can buy the departing owner's interest, how the business will be valued at the time of the transfer, and how the purchase will be funded. By answering these questions in advance, U.S. business owners can avoid costly litigation and ensure continuity for employees, customers, and remaining stakeholders.

What's Covered in This Template

Doxuno's buy-sell agreement template covers all essential provisions needed to create a comprehensive ownership transition plan. Each section is customizable to match your specific business structure and ownership arrangement.

Company Information

Owner Details

Agreement Type

Trigger Events

Valuation Method

Funding Mechanism

Right of First Refusal

Appraisal Frequency

Transfer Restrictions

Non-Compete Clause

Disability Provisions

Governing Law

How to Create a Buy-Sell Agreement

Creating a buy-sell agreement requires careful consideration of your business structure, ownership arrangement, and financial resources. Our template walks you through each decision point with clear options and helpful explanations. Follow these steps to build a comprehensive agreement.

  1. 1

    Enter Company Information

    Provide the legal name of your business, entity type (LLC, Corporation, Partnership, or S-Corp), state of formation, principal address, and date of the agreement. This information identifies the business entity covered by the buy-sell agreement and determines which state laws apply.

  2. 2

    Add Owner Details and Ownership Percentages

    Enter each owner's full legal name, ownership percentage, title or role within the company, mailing address, and email. Accurate ownership percentages are critical because they determine the value of each owner's interest when a trigger event activates the buyout obligation.

  3. 3

    Select Agreement Type and Trigger Events

    Choose an agreement structure: Cross-Purchase (owners buy from each other), Entity Redemption (company buys back the interest), Hybrid, or Wait-and-See. Then select which events will trigger the buyout, including death, disability, retirement, voluntary withdrawal, involuntary termination, bankruptcy, or divorce.

  4. 4

    Define Valuation and Funding Methods

    Choose how the business will be valued at the time of a trigger event: fixed price, formula, independent appraisal, book value, or multiple of earnings. Then select the funding mechanism for the buyout, such as life insurance, installment payments, cash reserves, or a combination of these methods.

  5. 5

    Set Transfer Restrictions and Governing Law

    Configure restrictions on ownership transfers, including right of first refusal and non-compete provisions. Specify the governing state law and dispute resolution method (mediation, arbitration, or litigation). Review the completed agreement, then download the PDF for all parties to sign.

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Continue editing in Word after download. Add custom clauses, reuse the template for similar agreements, or share with a colleague for collaborative review.

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Legal Considerations for US Buy-Sell Agreements

Buy-sell agreements are among the most important documents for multi-owner businesses. They function as business prenuptial agreements, establishing clear rules before disputes arise. Understanding the legal and tax implications of different agreement types helps you make informed decisions that protect all parties involved.

This template is provided for informational purposes and does not constitute legal advice. Buy-sell agreements involve complex legal and tax considerations. Consult a licensed attorney and tax advisor in your jurisdiction before finalizing your agreement.

Reviewed by legal professionals. The content on this page and the template clauses have been reviewed by licensed attorneys in the United States to ensure accuracy and legal soundness for standard buy-sell agreement scenarios.

Agreement Type Affects Tax Treatment

The choice between Cross-Purchase and Entity Redemption has significant U.S. tax implications. In a Cross-Purchase agreement, the purchasing owners receive a step-up in tax basis for the acquired interest, which can reduce future capital gains taxes under American law. In an Entity Redemption, the company uses its funds to buy back the interest, which may simplify administration but does not provide the same tax basis advantages. Consult a U.S. CPA to determine which structure is most tax-efficient for your specific situation.

Valuation Must Be Defensible

The U.S. IRS may scrutinize the valuation used in a buy-sell agreement, especially when the transaction involves related parties or when the purchase price is significantly different from fair market value. Using an independent appraiser and establishing a regular valuation schedule helps ensure the agreed-upon price withstands IRS review under American tax rules. The valuation method should be reasonable, consistently applied, and documented in writing.

Insurance Funding Requires Proper Ownership

When life insurance is used to fund a buy-sell agreement, the ownership and beneficiary designations must align with the agreement type. In a Cross-Purchase arrangement, each owner typically owns policies on the other owners. In an Entity Redemption, the company owns and is beneficiary of policies on each owner. Mismatched ownership can create unintended tax consequences and may prevent the insurance proceeds from being available when needed.

Frequently Asked Questions

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Create a professional U.S. buy-sell agreement in minutes. Define trigger events, valuation methods, and funding mechanisms to ensure smooth ownership transitions for your American business.

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