What terms should you include in a buy sell agreement?

There are five key elements to a buy sell agreement: death, disability, retirement, withdrawal, and termination. Each of those elements needs to be thought through. What is commonly covered is death. You buy life insurance on each of the partners. If they die, their life insurance buys out their ownership interest. Each of the other issues is much more costly. If somebody is disabled, you have to buy disability insurance for them. The startup company cannot afford to pay payroll to somebody who is not going to be able to work. The issue of termination is very complex. It is something that takes a lot of thought and is not so easy to document until the shareholders understand how you might terminate somebody and what that means.