How to Write a Buyout Letter

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Breaking up is hard to do, and when writing a buyout letter, not only are you notifying the other party that a former owner or partner is no longer part of a company, but you are soothing ruffled feathers as the company transitions to new ownership. For small businesses such as partnerships and LLCs, the buyout letter can refer to an existing or pending buyout agreement between the parties.

State Intention or Event

Whether you are writing to a client of the firm that has been bought out already, or expressing intentions to buy out a company to the present owner, you will announce those intentions or circumstances in the first paragraph. In the first case, you would inform the recipient that the company has been bought out, stating you have replaced the previous owner or partner and that she is no longer associated with the company. In the latter scenario, affirm your offer to purchase the owner/partner's shares and attach or enclose the buyout agreement.

Discuss Continuity

In the case of addressing an existing client, the second paragraph serves to assure that the same quality and care that he has experienced with the company should not be affected by the handover. To the partner that will be bought out, suggest reviewing the material and consulting with his own attorney. Ask him to sign and return the enclosed buyout agreement as soon as possible.

Get Specific

If you are writing to a client and the buyout results in structural changes to the company, state what the customer can expect in the future. When addressing a partner or LLC partner who will be bought out, discuss aspects of any existing buyout agreement that the addressee should be made aware of. For example, you might remind the recipient why the agreement was triggered, i.e. a bankruptcy or death, or reiterate specific rights and options that make this particular buyout possible or necessary.

Offer Thanks

Because buyouts can be stressful and disruptive to the parties involved, offer sympathetic encouragement and thank the recipient for his cooperation. If the addressee is a client, thank her for being a valued client and express your hope that you will continue to serve her into the future. If the addressee is the to-be-bought-out partner, thank her for her understanding during this difficult time.

References

About the Author

Timothea Xi has been writing business and finance articles since 2013. She has worked as an alternative investment adviser in Miami, specializing in managed futures. Xi has also worked as a stockbroker in New York City.

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