What is the primary focus of a buy-sell agreement?

The primary focus of a buy-sell agreement is to protect the value of the business. This agreement is a legally binding contract that outlines what happens to a business interest in the event of an owner's death, disability, retirement, or other triggering events. It ensures a smooth transition of ownership by establishing a predefined procedure for buying and selling shares among the owners or the business, which helps maintain the financial stability and operational continuity of the business.

By clearly delineating how ownership interests will be transferred and at what value, a buy-sell agreement safeguards the interests of all parties involved and provides a mechanism to determine fair compensation for the departing owner’s share. This helps to prevent conflicts and protects the business's valuation, which is critical for its sustainability and growth.

The other choices, while they may relate to aspects of managing a business, do not capture the essence of what a buy-sell agreement specifically aims to achieve.