Rhode Island Acuerdo de compra-venta entre dos accionistas de sociedad anónima cerrada - Buy-Sell Agreement between Two Shareholders of Closely Held Corporation

• Category: Sociedades Anónimas - Contratos - Fusiones
• State: Multi-State
• Control #: US-02553BG
• Format: Word

Description

A corporation whose shares are held by a single shareholder or a closely-knit group of shareholders (such as a family) is known as a close corporation. The shares of stock are not traded publicly. Many of these types of corporations are small firms that in the past would have been operated as a sole proprietorship or partnership, but have been incorporated in order to obtain the advantages of limited liability or a tax benefit or both. A buy-sell agreement is an agreement between the owners (shareholders) of a firm, defining their mutual obligations, privileges, protections, and rights. Rhode Island Buy-Sell Agreement between Two Shareholders of Closely Held Corporation: A Comprehensive Guide In Rhode Island, a buy-sell agreement between two shareholders of a closely held corporation is a crucial legal document that outlines the terms and conditions under which the shares of a shareholder can be bought or sold. This agreement provides a clear framework for handling future events such as the death, retirement, disability, or voluntary sale of shares by one of the shareholders. The objective is to ensure a smooth transition of ownership and protect the interests of both parties involved. Key features of a Rhode Island Buy-Sell Agreement: 1. Trigger Events: The agreement should establish the trigger events that can initiate a buy-sell transaction. These commonly include death, disability, retirement, divorce, bankruptcy, or voluntary sale of shares. 2. Valuation Method: It is crucial to outline the valuation method to determine the fair market value of the shares. Various methods could be employed, such as appraisals by independent professionals, fixed formulas based on financial metrics, or a combination of these approaches. 3. Funding Mechanisms: The agreement should address how the purchase price will be funded. Options may include cash payments, installment payments, bank financing, or utilizing life insurance policies. 4. Right of First Refusal: This provision grants the remaining shareholder the opportunity to purchase the shares before they are offered to any external third party. It ensures the controlling shareholder maintains control and prevents unwanted third-party ownership. 5. Restrictive Covenants: The agreement may include restrictive covenants, such as non-competition and non-solicitation clauses, to protect the corporation's interests and prevent shareholders from competing with the business after a buy-sell transaction. Types of Rhode Island Buy-Sell Agreements: 1. Cross-Purchase Agreement: Under this agreement, each shareholder has the option to purchase the shares of the other shareholder(s) upon a triggering event. This is suitable for corporations with a limited number of shareholders. 2. Stock Redemption Agreement: In this agreement, the corporation itself, rather than individual shareholders, is obligated to purchase the shares upon a triggering event. The corporation uses corporate funds or insurance policies to finance the redemption. 3. Hybrid Agreement: This agreement combines elements of both the cross-purchase and stock redemption agreements, providing a flexible approach based on the specific circumstances of the closely held corporation and its shareholders. 4. Wait and See Agreement: This unique agreement defers the choice between a cross-purchase or stock redemption approach until a triggering event occurs. This allows flexibility based on the financial position of the shareholders or the corporation at the time. Creating a Rhode Island Buy-Sell Agreement is a complex task that requires the involvement of legal professionals well-versed in corporate law. The agreement should be regularly reviewed and updated to ensure it reflects the current circumstances and objectives of the shareholders. Failure to have a comprehensive buy-sell agreement in place may lead to disputes, financial uncertainty, or unintended consequences in the future.

Rhode Island Buy-Sell Agreement between Two Shareholders of Closely Held Corporation: A Comprehensive Guide In Rhode Island, a buy-sell agreement between two shareholders of a closely held corporation is a crucial legal document that outlines the terms and conditions under which the shares of a shareholder can be bought or sold. This agreement provides a clear framework for handling future events such as the death, retirement, disability, or voluntary sale of shares by one of the shareholders. The objective is to ensure a smooth transition of ownership and protect the interests of both parties involved. Key features of a Rhode Island Buy-Sell Agreement: 1. Trigger Events: The agreement should establish the trigger events that can initiate a buy-sell transaction. These commonly include death, disability, retirement, divorce, bankruptcy, or voluntary sale of shares. 2. Valuation Method: It is crucial to outline the valuation method to determine the fair market value of the shares. Various methods could be employed, such as appraisals by independent professionals, fixed formulas based on financial metrics, or a combination of these approaches. 3. Funding Mechanisms: The agreement should address how the purchase price will be funded. Options may include cash payments, installment payments, bank financing, or utilizing life insurance policies. 4. Right of First Refusal: This provision grants the remaining shareholder the opportunity to purchase the shares before they are offered to any external third party. It ensures the controlling shareholder maintains control and prevents unwanted third-party ownership. 5. Restrictive Covenants: The agreement may include restrictive covenants, such as non-competition and non-solicitation clauses, to protect the corporation's interests and prevent shareholders from competing with the business after a buy-sell transaction. Types of Rhode Island Buy-Sell Agreements: 1. Cross-Purchase Agreement: Under this agreement, each shareholder has the option to purchase the shares of the other shareholder(s) upon a triggering event. This is suitable for corporations with a limited number of shareholders. 2. Stock Redemption Agreement: In this agreement, the corporation itself, rather than individual shareholders, is obligated to purchase the shares upon a triggering event. The corporation uses corporate funds or insurance policies to finance the redemption. 3. Hybrid Agreement: This agreement combines elements of both the cross-purchase and stock redemption agreements, providing a flexible approach based on the specific circumstances of the closely held corporation and its shareholders. 4. Wait and See Agreement: This unique agreement defers the choice between a cross-purchase or stock redemption approach until a triggering event occurs. This allows flexibility based on the financial position of the shareholders or the corporation at the time. Creating a Rhode Island Buy-Sell Agreement is a complex task that requires the involvement of legal professionals well-versed in corporate law. The agreement should be regularly reviewed and updated to ensure it reflects the current circumstances and objectives of the shareholders. Failure to have a comprehensive buy-sell agreement in place may lead to disputes, financial uncertainty, or unintended consequences in the future.

Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.