An entity purchase buy-sell is a business-continuation agreement in which the company buys a deceased owner's shares, often funded with company-owned life insurance. The corporation or LLC owns and is beneficiary of policies on owners. At death, the entity redeems the shares, simplifying policy count. Tax and basis outcomes differ from cross-purchase structures and should be modeled with advisors.

Companies funding entity redemption own policies on each owner. On death, proceeds redeem shares, simplifying ownership. Advisors compare tax outcomes to cross-purchase, review valuation clauses, and keep policy amounts aligned with appraised value. Lenders or SBA loans may require proof of coverage to protect continuity.