DocDraft Logo

Louisiana Buy-Sell Agreement Template

The Louisiana civil-law rules that shape the document: mandatory spousal concurrence for a community enterprise and a parish-enumerated, two-year non-compete.

Introduction

A buy-sell agreement is the contract Louisiana co-owners use to agree in advance on who may acquire a departing owner's interest in the business, at what price, and on what triggers such as death, disability, divorce, or exit. In Louisiana, a civil-law community-property state, two rules shape the document beyond the national template: the concurrence of both spouses is required to alienate, encumber, or lease all or substantially all of the assets of a community enterprise (Louisiana Civil Code Article 2347), so a Louisiana buy-sell of a community business interest needs a spouse's signature, not merely notice; and a covenant not to compete against a selling owner is null and void under Louisiana Revised Statutes 23:921 unless it enumerates a specified parish or municipality and caps the restriction at two years from the sale.

0/5000

Key Things to Know

  1. 1

    A Louisiana buy-sell agreement is a binding contract among the co-owners of a business that fixes who can buy a departing owner's interest, the price or valuation method, and the triggering events, so a death, divorce, or exit does not force the business into a dispute or a sale to an outsider.

  2. 2

    Louisiana is a civil-law community property state. Under Louisiana Civil Code Article 2347, the concurrence of both spouses is required to alienate, encumber, or lease all or substantially all of the assets of a community enterprise. This is a mandatory joinder, stronger than notice, so a spouse must sign.

  3. 3

    In Louisiana, a covenant not to compete against a selling owner is null and void under Louisiana Revised Statutes 23:921 unless it fits the sale-of-goodwill exception. The clause must name a specified parish or parishes, or municipality or municipalities, or parts of them, and cannot exceed two years.

  4. 4

    The two-year cap in Louisiana Revised Statutes 23:921 runs from the date of sale, and the restriction holds only so long as the buyer carries on a like business in the enumerated area. A Louisiana buy-sell should draft the non-compete to these limits or the covenant fails entirely.

  5. 5

    In Louisiana, a transfer restriction imposed by the issuer is ineffective against a person without knowledge of it unless it is noted conspicuously on the certificate or the registered owner is notified (Louisiana Revised Statutes 10:8-204). Add the legend when your Louisiana company issues or endorses certificates.

  6. 6

    In Louisiana, a private buy-sell agreement requires no recording or notarization to be valid between the parties. It is enforceable as a signed writing. Keep the signed Louisiana agreement with the company records and update the valuation periodically as the business changes.

  7. 7

    Fund the Louisiana buyout before you need it. Owners commonly use life or disability insurance, a sinking fund, or installment payments so the agreed valuation can be paid when a trigger occurs. Match the funding to the valuation method your Louisiana agreement sets.

Key decisions before you file

Before you file a Buy-Sell Agreement in Louisiana, a few decisions shape the document: which option to choose and what each one means. The Buy-Sell Agreement guide walks through them.

Open the Buy-Sell Agreement guide

Customize your Buy-Sell Agreement Template with DocDraft

Louisiana Buy-Sell Agreement (Compact State Terms)

This compact set states the Louisiana-specific terms of a Buy-Sell Agreement. Use it together with the full national Buy-Sell Agreement template, which contains the general purchase, trigger, and closing provisions.

1. Governing Law. This Agreement is governed by the laws of the State of Louisiana, without regard to its conflict-of-laws rules.

2. Community Property; Spousal Concurrence. Each married Owner acknowledges that an interest in the Company may be community property under Louisiana's civil-law community regime. Where the interest is all or substantially all of the assets of a community enterprise, the concurrence of both spouses is required for its alienation, encumbrance, or lease under Louisiana Civil Code Article 2347. Accordingly, the spouse of each married Owner shall sign the Spousal Concurrence below to concur in this Agreement and its transfer restrictions. A transfer that lacks a required concurrence may be attacked, so the parties treat the concurrence as a condition of any covered transfer.

3. Restrictive Covenant (Sale-of-Goodwill Exception). Any covenant by a selling Owner not to compete is made under, and limited to, the sale-of-goodwill exception in Louisiana Revised Statutes 23:921. The selling Owner, having sold the goodwill of the business, agrees not to carry on a similar business or solicit customers within [specify the parish or parishes, or municipality or municipalities, or parts thereof], for a term not to exceed two years from the date of sale, and only so long as the Company or its successor carries on a like business there. The parties acknowledge that, under Louisiana Revised Statutes 23:921, a restraint that does not enumerate the parish or municipality or that exceeds two years is null and void.

4. Valuation. The purchase price is the [fixed price / formula / appraised fair value] stated in the national template, updated at least [annually]. The parties intend this Louisiana valuation to control any purchase of a departing Owner's interest triggered under this Agreement, and elect the method above so the price is set before a trigger occurs.

5. Transfer Restriction Legend. The Company shall note the transfer restrictions in this Agreement conspicuously on each certificate, and shall notify the registered owner of any uncertificated interests, so the restrictions are effective against later takers under Louisiana Revised Statutes 10:8-204.

6. Execution. This Agreement is effective when signed by the Owners and the Company. No recording or notarization is required for a private Louisiana buy-sell to be valid between the parties.

Spousal Concurrence. The undersigned is the spouse of an Owner. I have read this Agreement and concur, under Louisiana Civil Code Article 2347, in its terms and transfer restrictions as they affect all or substantially all of the assets of a community enterprise.

Owner: ______________________ Date: __________

Spouse: _____________________ Date: __________

This compact Louisiana set supplements the national Buy-Sell Agreement template. It is general information, not legal advice; attorney review is available.

Louisiana Requirements for Buy-Sell Agreement

Louisiana Spousal Concurrence for a Community Enterprise

Louisiana is a civil-law community property state. Louisiana Civil Code Article 2347 requires the concurrence of both spouses to alienate, encumber, or lease all or substantially all of the assets of a community enterprise. Include a spousal concurrence signature block so a covered transfer is not later attacked as invalid.

Louisiana Non-Compete Requires Enumerated Parishes and a Two-Year Cap

Under Louisiana Revised Statutes 23:921, a covenant restraining a lawful business is null and void except under the sale-of-goodwill exception. A Louisiana non-compete must enumerate a specified parish or municipality, or parts of them, and cannot exceed two years from the date of sale.

Louisiana Non-Compete Runs Only While the Buyer Operates

Louisiana Revised Statutes 23:921 limits a sale-of-goodwill covenant to two years from the sale and holds it only so long as the buyer carries on a like business in the enumerated area. Draft the Louisiana clause to both limits, because a longer or unbounded restraint fails entirely.

Louisiana Transfer Restriction Noted on the Certificate

Under Louisiana Revised Statutes 10:8-204, a transfer restriction imposed by the issuer is ineffective against a person without knowledge unless it is noted conspicuously on the certificate, or the registered owner of uncertificated interests is notified. Add the legend when your Louisiana company issues or endorses certificates.

Louisiana Signed Writing; No Recording or Notarization Required

A private Louisiana buy-sell agreement requires no recording or notarization to be valid between the parties and is enforceable as a signed writing. Keep the signed Louisiana agreement with the company records and update the valuation periodically as the business changes.

Frequently Asked Questions

It is a contract among the owners of a Louisiana business that sets who may buy an owner's interest, the price or valuation method, and the triggers such as death, disability, divorce, or a voluntary exit. It keeps ownership inside the group and prevents disputes when an owner leaves.

In Louisiana, an operating agreement or bylaws set how the business runs day to day. A buy-sell agreement covers only ownership transitions: what happens to an owner's interest on death, disability, divorce, or departure, how it is priced, and who may buy it. Many Louisiana companies keep both.

Often yes. Louisiana is a civil-law community property state, and Louisiana Civil Code Article 2347 requires the concurrence of both spouses to alienate or encumber all or substantially all of the assets of a community enterprise. That is a mandatory signature, so include a spousal concurrence block.

Only within narrow limits. Louisiana Revised Statutes 23:921 makes such restraints null and void except under the sale-of-goodwill exception. The covenant must enumerate a specified parish or municipality and cannot exceed two years from the sale, or it fails. Draft it to those limits.

Very specific. Under Louisiana Revised Statutes 23:921, a sale-of-goodwill covenant must name the specified parish or parishes, or municipality or municipalities, or parts of them, where the restriction applies. A vague or statewide area risks nullity, so list the covered Louisiana parishes by name.

No. A private Louisiana buy-sell agreement requires no recording or notarization to be valid between the parties. It is enforceable as a signed writing. Keep the signed agreement with the company records and update the valuation periodically as the Louisiana business changes.

Louisiana owners commonly use life or disability insurance on each owner, a sinking fund, or installment payments from the buyer. Pre-funding matters so the agreed valuation can be paid when a trigger occurs. Match the funding to the valuation method your Louisiana agreement sets.