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Buy And Sell Agreement Life (Insurance) Template for New Zealand

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Key Requirements PROMPT example:

Buy And Sell Agreement Life (Insurance)

"I need a Buy and Sell Agreement Life (Insurance) for my three-partner medical practice in Auckland, with mandatory purchase obligations upon death or permanent disability, and a fixed valuation method based on previous year's revenue."

Document background
The Buy And Sell Agreement Life (Insurance) is a crucial document for businesses operating in New Zealand where multiple owners wish to ensure smooth ownership transition in the event of death or other specified circumstances. This agreement is particularly important for closely-held businesses, partnerships, and private companies where the continued operation of the business depends on clear succession planning. The document combines elements of both business purchase agreements and life insurance arrangements, ensuring that surviving business owners have both the obligation and the financial means (through insurance proceeds) to purchase a deceased owner's interest. It operates within New Zealand's legal framework, particularly considering the Insurance (Prudential Supervision) Act 2010, Contract and Commercial Law Act 2017, and relevant tax legislation. The agreement typically includes detailed provisions for valuation, transfer mechanisms, and insurance policy requirements.
Suggested Sections

1. Parties: Identifies and provides full details of all parties to the agreement

2. Background: Sets out the context and purpose of the agreement, including business relationship between parties

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Purchase and Sale Obligations: Core provisions outlining the obligation to buy and sell business interests upon triggering events

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

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

7. Valuation Method: Specifies how the business interest will be valued when a triggering event occurs

8. Payment Terms: Outlines how and when payment will be made, including use of insurance proceeds

9. Tax Provisions: Addresses tax implications and allocations

10. Notice Requirements: Specifies how and when notices must be given between parties

11. General Provisions: Standard boilerplate clauses including governing law, amendments, and dispute resolution

Optional Sections

1. Disability Provisions: Additional provisions specific to disability triggers, used when disability coverage is included

2. Cross-Purchase vs. Entity Purchase: Specific structure of purchase arrangement, included when parties want flexibility in purchase structure

3. Right of First Refusal: Included when parties want additional control over voluntary transfers

4. Family Transfer Exceptions: Used when parties want to allow certain transfers to family members without triggering buy-sell provisions

5. Competing Business Restrictions: Added when parties want to include non-compete provisions

6. Premium Payment Obligations: Detailed provisions about who pays insurance premiums, included when cost-sharing is complex

7. Mandatory Purchase vs. Option: Used when parties want flexibility in purchase obligations

Suggested Schedules

1. Schedule 1 - Insurance Policy Details: Lists specific insurance policies, including policy numbers, insurers, and coverage amounts

2. Schedule 2 - Valuation Formula: Detailed methodology for business valuation

3. Schedule 3 - Ownership Interests: Current ownership percentages and structure

4. Schedule 4 - Premium Payment Schedule: Details of premium payments, including amounts and responsible parties

5. Appendix A - Sample Valuation Certificate: Template for documenting agreed business value

6. Appendix B - Notice Forms: Standard forms for giving various notices under the agreement

7. Appendix C - Transfer Documentation: Template documents for executing transfers of interest

Authors

Alex Denne

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

Relevant legal definitions








































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Relevant Industries

Professional Services

Manufacturing

Retail

Healthcare

Technology

Construction

Hospitality

Agriculture

Real Estate

Financial Services

Relevant Teams

Legal

Finance

Executive

Risk Management

Compliance

Corporate Governance

Business Development

Operations

Relevant Roles

Business Owner

Managing Director

CEO

CFO

General Counsel

Legal Counsel

Business Development Manager

Risk Manager

Insurance Manager

Financial Controller

Company Secretary

Partner

Shareholder

Board Member

Operations Director

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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