Buy-Sell Agreement Attorney Serving the DMV
Co-own a business in Maryland, D.C., or Virginia? A buy-sell and succession agreement sets who buys an owner's share, at what price, and how, when an owner exits.
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A buy-sell agreement is a contract among business co-owners that sets what happens to an owner’s share when that owner dies, leaves, or is bought out. Thienel Law drafts buy-sell and succession agreements for companies across Maryland, D.C., and Virginia.
Every co-owned business will face the day one owner leaves. An owner may die, retire, divorce, fall out with a partner, or simply want out. A buy-sell agreement decides in advance who may buy that owner’s share, how the price is set, and how the purchase is paid for. Thienel Law drafts these agreements for shareholders, LLC members, and partners across Maryland, D.C., and Virginia. You work directly with Stephen Thienel, one attorney who handles the business, tax, and estate sides of the plan in-house, so the buyout that works on paper still works when a death or dispute triggers it. Settle these terms while every owner still agrees, not in a crisis.
What is a buy-sell and succession agreement, and who needs one?
A buy-sell agreement, sometimes called a business prenup, is a binding contract among a company’s owners that controls when and how an ownership interest can change hands. A succession agreement extends the same idea to the planned handoff of a business, often to the next generation or to key employees.
Any business with more than one owner needs one, and so does a family business planning a transfer to children, managers, or a single chosen successor.
What happens to a business with no buy-sell agreement?
Without a buy-sell agreement, an owner’s share does not disappear when that owner exits. It passes by will, by divorce decree, or by default to people the other owners never chose, such as a surviving spouse or adult children who suddenly vote on the business.
The remaining owners then face problems no one planned for. They can deadlock over what the share is worth, because no one set the price in advance. A minority owner can be trapped with an interest no outside buyer wants. Any of these can stall decisions, drain cash, or force a sale of the company. A clear agreement fixes the buyer, the price method, and the funding before a triggering event does it for you.
What goes into a buy-sell and succession agreement?
Every agreement is built around how the business is owned and what the owners want on an exit. Common terms include:
- Trigger events: death, disability, retirement, resignation, divorce, bankruptcy, loss of a required license, or a deadlock among owners
- The buyout structure: a cross-purchase (the owners buy), a redemption (the company buys), or a hybrid
- A valuation method: a fixed price, a formula, or an independent appraisal, kept current on a schedule
- Funding: life and disability insurance, installment terms, or a reserve, so the buyer can actually pay
- Transfer restrictions and a right of first refusal that keep an ownership stake from reaching outsiders
- Drag-along and tag-along terms for a future sale of the company
- Non-compete and non-solicitation covenants tied to a departing owner
- Coordination with each owner’s estate plan and the tax treatment of the buyout, reviewed with the LL.M. in taxation in-house
You get clear, flat terms before the drafting begins, so you know the scope and the cost up front.
How does Thienel Law handle a buy-sell agreement?
You start with a free 30-minute consultation. It is a fit conversation for co-owners who are ready to hire an attorney, not a strategy session, so we use it to understand the ownership and confirm we are the right match. From there you work directly with Stephen, not a paralegal or an intake queue. The practice runs online, with secure document sharing, video meetings, and electronic signatures, so co-owners can review and sign remotely. Stephen drafts the terms to fit your entity type and keeps the tax and estate consequences in view.
How are buy-sell agreements enforced in Maryland, D.C., and Virginia?
A buy-sell agreement is enforced through the law that governs the entity and through the entity’s own governing document, so the drafting has to match the form the business takes. The three DMV jurisdictions reach the same result through separate statutes.
For a corporation, the buy-sell terms usually sit in a shareholder agreement backed by restrictions on the transfer of shares. Virginia lets a shareholder agreement or the articles restrict share transfers and require a first offer or a mandatory buyout, and the District of Columbia authorizes the same restrictions in nearly identical language. Maryland grounds the same power in the corporate charter, which may impose restrictions on the transferability of stock for any purpose.
For an LLC, the operating agreement carries the buy-sell terms, and each jurisdiction lets that agreement govern the company’s internal affairs, including how a membership interest is transferred and when a new owner is admitted. For a partnership, the partnership agreement controls, and all three follow the uniform rule that a payment to a retired or deceased partner, whether a retirement benefit or an installment purchase of the interest, does not by itself make the recipient a partner. That rule lets a succession plan pay out an exiting owner without handing control to an heir.
Related business services for DMV co-owners
A buy-sell agreement rarely stands alone. For an LLC or partnership, the buy-sell terms usually live inside the operating or partnership agreement, and a new company can set them at business formation. When an owner exits, the deal runs through a business purchase or sale, and the surrounding contracts carry the terms. Because a buyout at death moves an ownership stake, the agreement should track each owner’s estate plan. A company leasing space may need a commercial lease reviewed, and businesses that want ongoing support can use Thienel Law as outside general counsel. All of this sits under the firm’s business law practice.
What clients say about working with Steve
I have worked with Steve Thienel for more than 20 years now and the experience has been amazing. Steve and his team are very thorough, they review all sides of a situation, and are very measured in how they approach a solution. They are 100% client focused and a pleasure to work with!
Throughout years, Steve has been my go to guy for business, real estate, and legal work. Steve works fast and is highly reliable. I would recommend Steve to anyone.
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Frequently asked questions
What is a buy-sell agreement?
A buy-sell agreement is a contract among the owners of a business that controls what happens to an owner's share when that owner dies, becomes disabled, retires, divorces, or otherwise leaves. It names who may buy the share, sets how the price is calculated, and states how the buyer pays.
What events trigger a buy-sell agreement?
Common triggers are the death, disability, retirement, or voluntary departure of an owner, along with divorce, bankruptcy, loss of a required professional license, or a deadlock among owners. The agreement lists which events force a buyout and which are optional.
How is the price of an owner's share decided?
The agreement sets the valuation method in advance, usually a fixed price the owners update on a schedule, a formula tied to the financials, or an independent appraisal at the time of the event. Fixing the method early is what prevents a fight over value when an owner leaves.
How is a buyout paid for?
Most buy-sell agreements are funded by life and disability insurance, installment payments, a company reserve, or a combination. In a cross-purchase the remaining owners buy the share and in a redemption the company buys it, and the two carry different tax results, so the buyout and the tax treatment are planned together.
Do I need a buy-sell agreement for an LLC, or only a corporation?
You can use a buy-sell agreement for any multi-owner entity, including an LLC, a partnership, and a corporation. In an LLC or partnership the terms usually live in the operating or partnership agreement, while a corporation typically uses a separate shareholder agreement.
What happens to my business if I have no buy-sell agreement?
Without one, an exiting owner's share passes by will, divorce decree, or state default rules, which can put a surviving spouse or heirs into the ownership group. The remaining owners may deadlock over value or be forced to sell the company to cash out a departed owner.
Ready to protect your business with a buy-sell agreement?
If you co-own a business and you are ready to hire an attorney to plan for an owner's exit, let's talk. Book a free 30-minute consultation and work directly with Stephen Thienel across Maryland, D.C., and Virginia.
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