The corporation or partnership buys the interest of the deceased shareholder of partner. This type of agreement is practical for businesses with several owners. Each surviving shareholder or partner agrees to buy the interest of any deceased business owner. Life Insurance Owned by the Buyer. This method is very economical.
Complete financing is guaranteed from the beginning and proceeds are free from income tax.
Cash values can be used for buyout due to retirement or disability. Personal Funds of Buyers. Most business people do not keep large sums of liquid assets on hand. They have their money working in their businesses. Sinking Fund in the Business .