What is a Buy-Sell Agreement? When a corporation is closely held, the concern by shareholders is what happens when one of the owners die?  What will be the makeup of the new ownership? Will the new partner be the wife, brothers or uncles of the dead partner?  Will they interfere in the operations of the company? Another question is will the partners have the money to buy the interest of the deceased partner?  The solution to this problem is a Buy-Sell Agreement between the owners or shareholders while they are living.  This way, the “What Ifs” are taken care of beforehand. This agreement to Buy and Sell ownership interest (stock shares or partnership) is part of a contract between the owners.  To fund the purchase, a major way of funding this purchase is through life insurance.