South Dakota Shareholders Buy Sell Agreement of Stock in a Close Corporation with Agreement of Spouse and Stock Transfer Restrictions is a legally binding document that outlines the terms and conditions for buying, selling, and transferring stock in a close corporation within the state of South Dakota. This agreement is designed to protect the interests of the shareholders and governs the process of stock transfers, ensuring a smooth transition of ownership and maintaining the integrity of the corporation. The agreement typically consists of several key provisions, including: 1. Buy-Sell Agreement: This provision outlines the procedures and conditions under which shareholders can buy or sell their stock in the close corporation. It establishes a mechanism for determining the stock's fair market value and sets the terms for payment and transfer of ownership. 2. Agreement of Spouse: In some cases, the spouse of a shareholder may have rights or interests in the stock. This provision addresses the involvement of the spouse in any stock transactions, ensuring their agreement and compliance with the terms of the agreement. 3. Stock Transfer Restrictions: To maintain the stability and control within the close corporation, this provision imposes restrictions on the transfer of stock. It may require the approval of the corporation or other shareholders before any stock transfer can take place, preventing unwanted individuals from becoming shareholders or diluting the ownership of existing shareholders. 4. Triggering Events: The agreement may include specific triggering events that would activate the buy-sell provisions. These events could include death, disability, retirement, divorce, bankruptcy, or voluntary departure from the corporation. By identifying these triggers, the agreement ensures a smooth transition of ownership and minimizes potential conflicts. 5. Valuation Methodology: This provision defines the methodology used to determine the fair market value of the stock when a buy-sell event occurs. It may include provisions for using independent appraisers, agreed-upon formulas, or other methods to establish a fair price for the shares. Types of South Dakota Shareholders Buy Sell Agreement of Stock in a Close Corporation with Agreement of Spouse and Stock Transfer Restrictions may vary based on the specific requirements of the corporation and the preferences of the shareholders. Some additional types or variations of the agreement may include: 1. Entity Redemption Agreement: This type of buy-sell agreement allows the corporation itself to redeem or repurchase the stock of a departing or deceased shareholder. It provides the corporation with the opportunity to maintain control and retain ownership of the stock. 2. Cross-Purchase Agreement: In this variation, the remaining shareholders have the option to purchase the shares of a departing or deceased shareholder. This type of agreement is often preferred by close corporations with a limited number of shareholders. 3. Hybrid Agreement: A hybrid agreement combines elements of both entity redemption and cross-purchase agreements, allowing both the corporation and the remaining shareholders to have the option to purchase shares under certain circumstances. In conclusion, a South Dakota Shareholders Buy Sell Agreement of Stock in a Close Corporation with Agreement of Spouse and Stock Transfer Restrictions is a crucial document that governs the process of buying, selling, and transferring stock in a close corporation. Its key provisions include buy-sell procedures, spouse agreement requirements, stock transfer restrictions, triggering events, and valuation methodologies. Different types of this agreement exist, including entity redemption, cross-purchase, and hybrid agreements, depending on the specific needs and preferences of the shareholders and the corporation.
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.