One-Way Buy-Sell Agreement Template

What Is the One-Way Buy-Sell Agreement?

This agreement creates an asymmetric relationship between co-owners. One party (the Buyer) receives an option to purchase the other party's (the Seller's) ownership interest when triggering events like death, disability, retirement, or voluntary exit occur. The Buyer decides whether to exercise this purchase right. The Seller cannot force the sale and cannot sell to outside parties without the Buyer's consent.

You'd use this arrangement when one owner provides the primary capital, relationships, or business expertise and needs protection from disruption. The other owner typically receives favorable current compensation or other benefits in exchange for accepting these restrictions. It's common when a senior owner brings in a junior partner, when an operating owner works alongside an investor owner, or when family members have unequal roles in a business.

 

 

Is This One-Way Buy-Sell Agreement Right for You?

You need this agreement if you're:

• A majority owner bringing in a minority partner
• An operating partner working with a capital investor
• A senior owner mentoring a junior owner
• A founder retaining control while adding co-owners
• An established owner accepting a new partner on trial
• A family business owner working with non-family partners

You definitely need this agreement if:

• Your co-owner could die or become disabled without warning
• You need veto power over who becomes a co-owner
• Your partner's departure would disrupt client relationships
• You've invested more capital and need protection
• Your partner has less business experience but important skills

 

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Keeps You Out of Court: Includes valuation methods in Article III, payment terms in Article IV, and dispute resolution in Article X that prevent costly fights over business value and ownership transfers.

 

 

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Step 3: Fill In the Highlighted Fields

Follow the bracketed guidance to select valuation methods, triggering events, and payment terms. Our how-to guide walks you through every complex decision.

 

Frequently Asked Questions

Can I use this template multiple times?

Yes. Your purchase includes unlimited use rights. Create agreements for multiple business partnerships, update terms as circumstances change, and reuse for future co-owner arrangements.

Is this contract legally binding?

Yes. When properly completed and signed, this creates an enforceable contract in all 50 states. Courts recognize one-way buy-sell agreements as valid mechanisms for business succession planning.

What's the difference between this and a regular buy-sell agreement?

Traditional buy-sell agreements are symmetric—both parties have equal rights to purchase each other's interest. This template creates an asymmetric arrangement where only one party (the Buyer) has purchase rights. The Seller cannot force a sale or refuse if Buyer exercises the option. Use this when owners have unequal positions and one needs control over exits.

How do I choose between the four valuation methods?

Fixed price with periodic adjustment works if you'll actually schedule annual reviews. Formula-based valuation (like 3.5x EBITDA) calculates automatically and works for businesses with predictable financials. Independent appraisal is most accurate but costs $5,000-$15,000 and takes months. Book value is simplest but typically undervalues businesses with intangible assets. The how-to guide explains when each method makes sense.

Should I fund this with life insurance?

Insurance makes the purchase financially feasible when the triggering event is death or disability. Without insurance, the Buyer must find other financing sources. The template includes optional insurance language where Buyer owns the policy and Seller cooperates with underwriting. Even with insurance, Buyer remains obligated to pay if Buyer exercises the option.

Can the Seller ever refuse to sell?

No. If a triggering event occurs and Buyer exercises the option, Seller must sell at the predetermined price. This is the fundamental nature of a one-way buy-sell agreement. If you want both parties to have veto rights over exits, you need a different agreement structure entirely.