A cross-purchase agreement directs the remaining owners (or the surviving owners in the event of an owner’s death) to purchase the departing owners’ interest. In some cases, it might give co-owners the right of first refusal to acquire the departing owner’s interest and allow for a third-party sale if they decline.

An entity purchase agreement (also called a redemption agreement) allows the business to purchase the departing owner’s share of the business.

A wait-and-see agreement, or hybrid agreement, allows for the purchase of a departing owner’s shares by either the business, the remaining owners, or both. The decision isn’t made until the triggering event occurs.

A wait-and-see agreement usually gives the business entity the first option to buy shares from the departing owner. If the business can’t or won’t acquire the shares, they’re offered to the remaining business partners, and if they won’t or can’t purchase the full ownership interest, the business must acquire the rest.

Buy-sell agreements can be used by business entities such as limited liability companies (LLCs), partnerships, and privately held or closely held corporations as long as they have more than one owner. Sole proprietorships can also use buy-sell agreements to plan for the sale of the business to a key employee if the owner dies or chooses to leave.