Buy-sell agreements are agreements/contracts between co-owners of a business, and provide the circumstances in which one of the owners can sell their interest; who can buy a co-owner’s interest; and how the sale price will be determined. Despite the somewhat confusing name, these buy-sell agreements are not relevant when both owners wish to sell the business to a third party (person or entity other than the two owners).

Because buy-sell agreements are only relevant when one of the co-owners’ interest is being sold, these agreements generally apply when a co-owner retires, gets divorced, goes bankrupt, becomes disabled, or dies. Buy-sell agreements usually provide for the remaining co-owner to buy the exiting co-owner’s interest in the business at an agreed-upon price, or to calculate the purchase price using an agreed-upon method of valuation (for valuing the company). It may be easier to think of these agreements as buyout agreements, as one owner is typically buying-out the other owner. Buy-sell agreements should carefully address these situations in which an owner is likely to exit the business, or in which the ownership of the business might otherwise change—for example, upon the divorce of an owner—and include the agreement and signature of the co-owners’ spouses if necessary.

In Utah, buy-sell agreements are contracts among co-owners of a business that outline the terms and conditions under which an owner's interest in the business may be sold. These agreements are particularly relevant in situations where one co-owner wishes to exit the business due to retirement, divorce, bankruptcy, disability, or death. The purpose of a buy-sell agreement is to ensure a smooth transition of ownership and to protect the interests of the remaining owners and the business itself. The agreement typically specifies who is allowed to buy the exiting owner's interest, such as the remaining co-owners or the company, and how the sale price will be determined, either through a pre-agreed price or a valuation method. In Utah, as in other states, these agreements are legally binding and enforceable as long as they comply with general contract law principles. It is advisable for the agreement to address potential changes in ownership and to include the consent of the co-owners' spouses when necessary to prevent future disputes or claims against the business.