An Argyle Cross Purchase Option Agreement

"In a two partner business the chances of one partner dying or becoming totally and permanently disabled before the age of 65 is 52% rising to 77% for 4 partner businesses and 89% for 6 partner businesses".

Without careful planning business succession can be the catalyst for business failure.

You can maximise the efficiency of, and minimise the disruptions caused by, the withdrawal of a key person from your business with the implementation of a Cross Purchase Option Agreement.

Death, total and permanent disablement, bankruptcy and retirement may all trigger the withdrawal of a partner from a business from time to time.

A Cross Purchase Option Agreement will ensure the ability of the continuing business partners to take control at a reasonable cost to protect the on-going business while at the same time ensuring the leaving partner or his dependents are afforded protection from business concerns and receive full value for their business interests.

Generally the funds to purchase a leaving partner’s interests will come from an insurance policy triggered by the happening of the "leaving event". Some businesses choose to self-insure although this will vary in individual circumstances.

The key features of the Argyle Partnership’s Cross Purchase Option Agreement are:

·	flexibility to achieve on-going business requirements and estate planning objectives;
·	flexibility in the type, and method of holding, life insurance policies;
·	significant asset protection;
·	flexibility to coordinate with business management agreements;
·	a simple and efficient means of ensuring a smooth reliable transition with the assurance that necessary funds will be available to maintain on-going business operations without the need for expensive legal wrangles;
·	supporting documentation including all relevant minutes, summaries and legal analysis.

Argyle Lawyers offers a comprehensive business succession planning service including structuring, tax advice and the implementation of all relevant agreements.

If you would like further information click here to e-mail our Tax and Superannuation Team.

Argyle Lawyers Pty Ltd prides itself on providing personal and tailored advice and products. If you would like to us to prepare a Cross Purchase Option Agreement for you please login to our Client Resources Page to download the relevant instruction sheet and notes to assist you to complete the instructions.

If you would like to register to access our Client  & Referrer  Resources Area  please email us at  admin@argylelawyers.com.au