Facts about Rights of First Refusal

• Preset prices to named persons must comply with state law.Comstock/Comstock/Getty Images
  
  Buy-sell agreements may allow an identified person a right of first refusal to buy business interests or assets. Rights of first refusal can involve preset prices that factor into account such things as capital contributions and the projected appreciation of assets. State laws govern many aspects of corporations, limited liability companies and certain forms of joint ventures and partnerships. Therefore, any buy-sell agreement offering preset pricing to named persons should be vetted to ensure compliance with applicable state law.
  
  

Pricing by Appraisals

• A buy-sell agreement should contemplate future disputes between business partners.Jupiterimages/Polka Dot/Getty Images
  
  Buy-sell agreements often use appraisal methods to substantiate the fairest possible purchase price for assets. Specific appraisers may be agreed upon in buy-sell agreements. Alternatively, a provision directing the use "an unbiased, mutually agreed upon appraiser" is also common. A buy-sell agreement is intended to avoid future disputes. Therefore, if business relations become combative, "mutually agreed upon" may be difficult to fulfill. Therefore, it is wise to address what will occur if the parties cannot agree upon an appraiser at the time of the sale. An agreement may state that each party shall obtain his own certified appraisal and an average of the appraised values shall set the purchase price.
  
  

Consider an Auction

• Auctions can fetch the best price.Stockbyte/Stockbyte/Getty Images
  
  Auctions can be used in buy-sell agreements to establish equitable pricing. A public auction through a reputable auctioneer is a reliable way to capture the highest sustainable asset price for market conditions. A buy-sell agreement can also structure the auction terms to set a minimum starting price for bidding. Auctions can be useful when assets are targeted toward a specific industry. For example, used, heavy equipment is frequently purchased at specialty construction auctions.
  
  

Role of Traditional Advertisement

• Online and prints ads can establish asset pricing in buy-sell agreements.Creatas Images/Creatas/Getty Images
  
  Buy-sell agreements can also set prices by traditional advertisement methods. A buy-sell agreement may state the business assets shall be sold by reasonably advertising the business interests or property in a reputable print or online forum. A timeline should be set for the length and frequency of advertising. Also, a contingency method should be in place in case no buyers come forward within the prescribed time for sale.
  
  

Evaluating the Benefits of Professional Advice

• Buy-sell agreements should have professional input.Jupiterimages/Pixland/Getty Images
  
  Consulting a lawyer is recommended for the drafting of a buy-sell agreement. A lawyer can ensure the agreement complies with the law and the affected parties are legally protected. A certified public accountant can apply optimal accounting methods for analyzing the value of specific business assets.