1. The price shall either be fixed in accordance with a formula set out in the agreement or determined. A well-developed buy-sell contract can go a long way in ensuring the generational longevity of a family business and can also help protect the family. Regularly implementing and updating a buy-sell contract is a smart practice for family entrepreneurs and can offer security for the future. Be especially careful to understand the wishes of shareholders when determining how the beneficiaries of the buyback will be taxed. Withdrawals by Company C can result in a combination of ordinary income (profits and profits) and capital gains. .