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Buy Sell Agreement Life (Insurance) Template for Hong Kong

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Key Requirements PROMPT example:

Buy Sell Agreement Life (Insurance)

"I need a Buy-Sell Agreement Life (Insurance) for my Hong Kong-based family business with three siblings as owners, with specific provisions for both death and retirement scenarios, and a fixed valuation method to be reviewed annually starting January 2025."

Document background
The Buy-Sell Agreement Life (Insurance) is a crucial business succession planning tool used in Hong Kong to ensure smooth transition of business ownership upon specific triggering events such as death, disability, or retirement of a business owner. This document is particularly relevant for partnerships, private companies, and family businesses operating under Hong Kong jurisdiction where continuity of business operations is essential. The agreement combines corporate law principles with insurance mechanisms, requiring each owner to maintain life insurance policies that provide the funding for the purchase of business interests. It addresses key aspects including valuation methodologies, transfer procedures, and payment terms while ensuring compliance with Hong Kong's regulatory framework, including the Insurance Ordinance and Companies Ordinance. The document is especially vital for businesses where owners want to maintain control over who can own business interests while ensuring their families receive fair value for their business share.
Suggested Sections

1. Parties: Identification of all parties to the agreement including business owners and their details

2. Background: Context of the agreement, including business ownership structure and purpose of the buy-sell arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Purchase Obligation: Core obligations of parties to buy/sell business interests upon triggering events

5. Triggering Events: Specific events that activate the buy-sell provisions (death, disability, retirement, etc.)

6. Insurance Requirements: Details of required life insurance policies, coverage amounts, and policy maintenance obligations

7. Purchase Price: Method of determining the purchase price of business interests

8. Payment Terms: Structure and timing of payments, including use of insurance proceeds

9. Rights and Obligations: Ongoing rights and obligations of parties regarding business operations and insurance policies

10. Tax Provisions: Treatment of tax implications and responsibilities

11. Notices: Process for giving formal notices under the agreement

12. General Provisions: Standard contractual provisions including governing law, amendments, and severability

Optional Sections

1. Disability Provisions: Additional provisions for disability-triggered purchases, used when disability insurance is included

2. Cross-Purchase Provisions: Specific provisions for cross-purchase arrangements, used when multiple owners may purchase shares

3. Entity Purchase Provisions: Provisions for company redemption of shares, used in entity purchase arrangements

4. Family Transfer Exceptions: Provisions allowing transfers to family members, used when family succession is contemplated

5. Drag-Along Rights: Rights forcing minority owners to join in a sale, used in larger ownership structures

6. Tag-Along Rights: Rights allowing minority owners to join in a sale, used in larger ownership structures

7. Dispute Resolution: Detailed dispute resolution procedures, used when standard litigation is not preferred

8. Trust Arrangements: Provisions for trust-held policies, used when insurance policies are held in trust

Suggested Schedules

1. Schedule 1 - Business Interest Details: Detailed description of business interests covered by the agreement

2. Schedule 2 - Insurance Policy Details: Specific information about life insurance policies including policy numbers, insurers, and coverage amounts

3. Schedule 3 - Valuation Method: Detailed methodology for business valuation

4. Schedule 4 - Excluded Assets: List of assets excluded from the valuation and transfer

5. Appendix A - Sample Calculation: Example calculations of purchase price under various scenarios

6. Appendix B - Required Notices: Forms and templates for required notices under the agreement

7. Appendix C - Insurance Requirements: Detailed specifications for required insurance coverage

8. Appendix D - Transfer Documentation: Templates for share transfer forms and other transfer documents

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions






































Clauses

































Relevant Industries

Professional Services

Manufacturing

Retail

Technology

Financial Services

Healthcare

Construction

Real Estate

Family Businesses

Small and Medium Enterprises

Trading

Hospitality

Relevant Teams

Legal

Finance

Compliance

Risk Management

Corporate Secretarial

Insurance

Tax Advisory

Wealth Management

Corporate Planning

Business Development

Relevant Roles

Business Owner

Managing Director

CEO

CFO

Corporate Lawyer

Insurance Broker

Financial Advisor

Risk Manager

Company Secretary

Compliance Officer

Business Succession Planner

Estate Planning Advisor

Corporate Trustee

Tax Consultant

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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