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Does your company have more than one shareholder? If so, you need a buy-sell agreement. Here is why.

A good buy-sell agreement helps protect the interests of each partner and ensures the successful continuation of the business. It covers contingencies such as death, disability, early retirement, third-party offers, or the wish to dissolve the partnership. The agreement should define the options and obligations of each partner with respect to buying and selling shares. It should also specify
the method for passing on ownership and determining the market value of the shares. Writing a buy-sell agreement is only the first step. True protection also depends on secure funding.

Funding the agreement
If you or your partner were to die tomorrow, it could be difficult for the surviving partner to raise the money needed to buy the deceased partner's shares. Borrowing money, using company funds, or selling company assets could jeopardize the business at a critical time when creditors might already be nervous about its viability. Funding a buy-sell agreement with life insurance may be the surest and least expensive way to guarantee that the money will be there - if and when the need arises. Each partner's ownership stake is protected, and the surviving partner is given the opportunity to become a full owner of a viable business.

Cash in a crisis
It's also important to have contingency funds available if you or your partner suffers a serious illness or injury. What would happen if you, or your partner, were unable to work for several months or never able to return to work? Ideally, you want to make sure you have the option of doing what's best for the partners, the families, and the business. Critical illness or disability insurance can potentially provide cash for various solutions. Cash could be used to hire a qualified replacement temporarily, to replace income, or to cover specialized medical and other expenses. The cash could also be used to buy out the shares of the disabled partner.

Review funding
Your buy-sell agreement and funding arrangements should be reviewed on a regular basis, and whenever significant changes occur in your business.

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Manulife Securities Investment Services Inc. is registered as a Mutual Fund Dealer, or its equivalent, with the provincial securities commissions and as such our Advisors are entitled to sell mutual funds and other approved securities as permitted under our registration. They may also be able to provide other services or products to you through their own business. As a member of the Mutual Fund Dealers Association of Canada ("MFDA"), Manulife Securities Investment Services Inc. is obligated to disclose to you that you may be dealing with companies other than Manulife Securities Investment Services Inc. when purchasing services or products from your Associate (remuneration to your Associate may also come from various sources depending on the services or products purchased). For example, your Associate may offer any one or more of the following through a separate business, which would not be the responsibility of Manulife Securities Investment Services Inc.:

* Deposit Instruments: GICs, Canada Savings Bonds;
* Fee for Service Financial Planning; * Estate Planning;
* Tax Planning or Income Tax Preparation;
* Insurance: Life, Accident, Sickness, Disability, General.

Please be sure that you have a clear understanding of which company you are dealing with for each of your services and products. Your Associate would be happy to provide any clarification you require.

The information contained herein is for Canadian residents only and does not constitute an offer to sell or a solicitation in any jurisdiction in which Manulife Securities or its Advisors are not appropriately licensed or registered or where any Product or Service is not eligible for sale. Details are available on request.