A buy-sell agreement is an agreement between partners of a partnership or between a shareholder and a corporation whereby the parties agree to the terms and conditions of a future sale of the partners or shareholder's interest. By signing the agreement, the party contractually limits his or her ability to dispose of his or her interest in the partnership or corporation to the terms of the agreement.
A buy-sell agreement is useful in assuring the orderly transfer of interests in the partnership or corporation. By limiting a party's ability to dispose of his or her interest in the partnership or corporation, control of the partnership or corporation may be assured.
A Shareholders' Buy-sell Agreement for Professional Corporation with Option to Purchase Shares on Termination of Employment or Death of Shareholder -- Purchase by Corporation or Remaining Shareholders is a legal document that outlines the terms of a shareholders' agreement to buy or sell shares in a professional corporation in the event of the termination of employment or death of a shareholder. The agreement typically provides for the purchase of the shares by the corporation, the other shareholders, or both. This type of buy-sell agreement is also known as a Cross-Purchase Agreement, a Buy-Sell Agreement, or a Shareholder Agreement. There are two main types of Shareholders' Buy-sell Agreement for Professional Corporation with Option to Purchase Shares on Termination of Employment or Death of Shareholder -- Purchase by Corporation or Remaining Shareholders, including a unilateral agreement and a reciprocal agreement. In a unilateral agreement, the corporation is obligated to purchase the shares upon termination of employment or death of the shareholder, while in a reciprocal agreement, each shareholder is obligated to purchase the shares of any other shareholder who terminates employment or dies.
