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...ivorce could financially upset or damage the agency? Do all principals work to...e of the initial questions that agents and bankers must ask and answer before even considering a re...

... , 1989) . In order not to leave the agency vulnerable to future competition by the producer, the agreement usually provides that the deferred compensation is lost if the producer competes with or accepts business from the accounts of the agency. At a minimum it offsets the damage suffered by the agency due to the competition. 5.4 Sale of shareholder's stock in corporation. If an agent sells his stock in an incorporated agency, he (not the corporation) receives the proceeds. There is no tax at the corporate level, and hence ... of ways. There can be a formula, such as 1 times or 1.25 times commissions. Such formulas have a way of getting out of date quickly, so they should be used with caution if the transaction is not to close soon. There can be an appraisal by a specialty insurance appraiser. These appraisals look at the bottom line rather than the gross commissions of the agency, and consider how the agency compares to others in the industry. They are aware of comparable sales. There can be a combined approach, under ... little down as possible. He typically wants to be able to depreciate as many of the assets he acquires over as short a time as possible, to reduce the tax cost of the acquisition. He also wants to avoid liabilities of the acquired business, such as errors & omissions exposure. The seller may wish to defer tax from the sale. He normally wants as much of a down payment as possible. He typically would prefer to have capital gains treatment for the gain from the sale of the business, rather than ordinary ...

...ency. At a minimum it offsets the damage suffered by the agency due to the com...t of a decedent, suffering both estate and income tax (with