A buy-sell agreement, also known as a buyout agreement, is a legally binding agreement between co-owners of a business that governs the situation if a co-owner dies or is otherwise forced to leave the business, or chooses to leave the business. The plan describes how the interest of each owner of the business will be valued; how each owner will be paid the value of their interest when they quit, retire or die; and identifies the source of funds that will be used to pay the value of their interest in the company. Buy-sell plans are an effective method for dealing with the issue of a co-owner leaving a business.