A buy-sell agreement, sometimes known as a buyout agreement, is a legally enforceable agreement between co-owners of a firm that specifies what happens if one of the co-owners dies, is forced to leave the business, or decides to leave the business.

It is frequently referred to as a “business will” or “premarital agreement” between company partners/shareholders. An insured buy-sell agreement (a triggered buyout is funded with life insurance on the lives of the participating owners) is frequently recommended by business succession specialists and financial planners to ensure that the buy-sell arrangement is well-funded and that money will be available when the buy-sell event is triggered.