Since, Company Z has a cross purchase buy-sell agreement, and it is funded with individual life insurance then Each partner must own a policy on the other partners.
Using a cross-purchase agreement, a company's stakeholders or other owners can procure the preferences or securities of a partner who eventually died, has become disabled, or resigned. In order to ease that transfer of value, the method frequently varies depending on a policy of life insurance in the occasion of a death.
A cross-purchase agreement is generally used during business continuity plans to clarify how share capital can be dispersed or obtained by the remaining survivor's partners, such as a fractional distribution based on each partner's shareholding portion of the company.
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