Thursday, March 5, 2026 - Broadridge Content

When selling your business — whether to a family member, a key employee, or a third party — unless the sale is entirely for cash, security devices should be negotiated into the sales contract to protect your future income stream. Most ownership transfers include payments made over time. There are two primary ways to structure these payments: You can exchange stock for an interest-bearing installment note, or you can accept payments through a supplemental pension plan funded from the future earnings of the business. You can also structure payments as a noncompetition agreement, a post-sale consulting contract, or royalty fees. Whenever you depend on future payments, you run the risk of not collecting those funds. However, there are steps you can take now to legally secure the income stream you'll depend on in the future. One approach is to negotiate restrictions on additional financing. Read more...