A buy-sell agreement is an agreement between the owners (shareholders) of a firm, defining their mutual obligations, privileges, protections, and rights. This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
A Texas Shareholders' Agreement is a legally binding contract between two shareholders of a closely held corporation in the state of Texas. This agreement governs the relationship and rights of the shareholders, outlining various provisions related to the operation, management, and transfer of shares within the corporation. It typically includes the buy-sell provisions, which serve as mechanisms to facilitate the transfer of shares between shareholders under specified circumstances. In a Texas Shareholders' Agreement with Buy-Sell Provisions, there are different types or variations that can be considered based on the specific needs and preferences of the shareholders involved. Here are a few common types: 1. Cross-Purchase Agreement: Under this arrangement, each shareholder agrees to purchase the shares of the other shareholder in the event of certain triggering events such as retirement, death, disability, or desire to sell. This type of agreement is typically used when there are only a few shareholders, and they have a close relationship. 2. Redemption Agreement: In this type of agreement, the corporation itself agrees to purchase the shares of the shareholder(s) in the event of specified triggering events. The corporation then retires or cancels the repurchased shares, resulting in an adjustment of ownership among the remaining shareholders. This type of agreement may be preferred when there are multiple shareholders or when the corporation has substantial assets for buyouts. 3. Hybrid Agreement: A hybrid agreement combines elements of both cross-purchase and redemption agreements. It allows the corporation and other individual shareholders to have the option of purchasing the shares of the departing shareholder, providing flexibility and tailoring the buy-sell provision to the specific circumstances. 4. Put-Call Agreement: This type of agreement grants one shareholder the right (call option) and the other shareholder the obligation (put option) to transact the shares at a predetermined price and terms in the event of triggering events. It provides a structured and predetermined method for share transfers. Texas Shareholders' Agreements with Buy-Sell Provisions offer protection and clarity to shareholders by establishing clear guidelines for the transfer of shares in various scenarios. These agreements can play a crucial role in the ongoing success and stability of closely held corporations in Texas.
