Death to a member of a closely held business usually will seriously disrupt the workings of the business organization. Also, the estate of the decedent may find his business interest an unwanted asset. A valuable business interest often must be sacrificed because of the pressing need for cash to pay debts, administrative expenses, and estate and inheritance taxes. Thus, death may place the continued existence of the business in jeopardy, make uncertain the interest of decedent's surviving business associates, and make necessary a forced liquidation of decedent's interest in the business at a sacrifice price. Consequently,a business man may find it advisable to make some provision for the sale of his business interest to his associates upon his death. This is true whether the business is operated as a sole proprietorship, a partnership, or a close corporation. The scope of this note will be limited to the problems facing stockholders of a close corporation.
Hugh J. Morgan Jr.,
Tax Aspects of Corporate Business Purchase Agreements Funded with Life Insurance,
9 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol9/iss2/12