A successful business is built on teamwork, planning, and trust. But every business faces moments of change—whether a partner retires, becomes disabled, becomes critically ill, or passes away. A Buy–Sell Agreement helps protect the company, the remaining partners, and the families involved during these major life events.
Many Canadian business owners use insurance from providers such as Sun Life, Canada Life, iA Financial, Manulife, or Desjardins to fund these agreements. As an independent financial advisory firm serving Quebec and Ontario, we help business owners understand their options and set up strategies that follow provincial regulations and best practices.
What Is a Buy–Sell Agreement?
A Buy–Sell Agreement is a legal contract between business partners.
It covers questions like:
• What happens to an owner’s share of the business if they’re no longer able to continue?
• Who is allowed to buy those shares?
• How much are the shares worth?
• How will the buyout be funded?
Without this agreement, businesses can face serious complications—conflicts between partners, financial stress, or families inheriting shares they cannot manage.
Why It Matters
A Buy–Sell Agreement gives everyone clarity and stability.
It protects:
• The business, by keeping ownership structured
• The remaining partners, by giving them a clear path forward
• The departing partner or their family, by ensuring they receive fair value
In both Quebec and Ontario, these agreements should be prepared by a lawyer or notary. Our role is to help secure the insurance funding that makes the agreement work effectively.
How Insurance Helps
Insurance provides the money needed to buy out a partner in a predictable, tax-efficient way. The most common tools include:
Life Insurance
Used when a partner passes away. The payout allows the surviving partners or the company to buy the shares immediately.
Disability Buy-Out Insurance
If a partner becomes permanently disabled, this coverage helps complete the buyout after a waiting period.
Critical Illness Insurance
If a partner is diagnosed with a serious illness (such as cancer, stroke, or heart attack), a lump-sum benefit can help fund the agreement.
All major insurers—Sun Life, Canada Life, iA, Manulife, Desjardins—offer solutions suitable for Buy–Sell planning.
Because we are independent, we compare options across companies to find the strategy that fits your business best.
Two Common Agreement Structures
Cross-Purchase
Each partner owns insurance on the others.
Suitable for smaller partnerships.
Corporate Redemption
The business owns the policies and buys back the shares.
Often easier to manage for larger companies.
Both approaches must follow CRA tax rules and provincial guidelines, and each has benefits depending on the business structure.
Getting the Value Right
A Buy–Sell Agreement must include a method for determining the value of the business, such as:
• a fixed value that is updated regularly,
• a valuation formula, or
• an independent professional valuation.
Clear valuation ensures fairness for all parties.
Who Needs a Buy–Sell Agreement?
Any business with more than one owner, including:
• Incorporated companies
• Partnership structures
• Family businesses
• Professional corporations (medical, dental, legal, accounting)
If two or more people own a business, a Buy–Sell Agreement is essential protection.
Our Process
When business owners reach out to us, the process typically includes:
- Understanding the ownership structure and long-term plans
- Reviewing risks and recommended protection
- Exploring insurance solutions from various Canadian insurers
- Coordinating with your lawyer or notary
- Ensuring the strategy follows AMF, FSRA, and CRA guidelines
Every situation is unique, which is why a custom review is necessary.
Protect Your Business With Proper Planning
A Buy–Sell Agreement funded with the right insurance ensures your business continues smoothly—no matter what happens. It protects your partners, your family, and the future of the company you’ve built.
If you’re considering setting up or updating a Buy–Sell Agreement, the next step is a professional review.
Our team helps owners explore options, compare quotes, and build a solid strategy.
Book a consultation with us to discuss your situation and get a clear, customized plan.
