You hoped it would never happen, but in the back of your mind, you knew it could: Your small business is being sued. Whether it has been filed by a current or ex-employee, client, vendor or even another business, a lawsuit against your company will likely cost you a lot of money… whether you win or lose. It’s normal to feel overwhelmed, upset, and indignant, but if you want to keep your business and it’s reputation intact during this time — it’s important to handle every step of the process carefully.
For businesses with more than one owner, the importance of a buy-sell agreement cannot be overstated. Events such as the death, incapacity, retirement or even divorce of one of the owners (“Triggering Events”) can sink a business if the owners have not entered into a buy-sell agreement. Unfortunately, most small business owners do not have this vital agreement in place.