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. 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.
Phoenix Arizona Stock Agreement — Buy Sell Agreement between Shareholders and Corporation A stock agreement, also known as a buy-sell agreement, is a legally binding contract that outlines the terms and conditions for the sale and purchase of stocks between shareholders of a corporation in Phoenix, Arizona. This agreement is crucial for protecting the interests of both shareholders and the corporation, establishing a framework in the event of various scenarios, including the death, disability, retirement, or voluntary exit of a shareholder. The Phoenix Arizona Stock Agreement — Buy Sell Agreement between Shareholders and Corporation typically includes key provisions addressing the following aspects: 1. Share Purchase Option: This provision outlines the circumstances triggering the sale of shares, including death, disability, voluntary exit, or retirement of a shareholder. It also determines the conditions and processes for exercising the purchase option. 2. Valuation: A stock agreement should specify the method of valuating shares, such as using a predetermined formula, independent appraisal, or mutually agreed-upon valuation experts. This provision ensures fairness in determining the price of shares during the buy-sell process. 3. Right of First Refusal: This provision grants existing shareholders the right to purchase the shares offered for sale before other parties. It helps to maintain the ownership structure of the corporation by preventing unwanted third-party ownership. 4. Mandatory Purchase Provision: In certain cases, such as a shareholder's retirement or disability, this provision requires the corporation or the remaining shareholders to purchase the shares from the exiting shareholder. This provision ensures a smooth transition and protects the departing shareholder's financial interests. 5. Funding Mechanisms: A stock agreement may include funding mechanisms to facilitate the purchase of shares, such as using life or disability insurance policies, company funds, or installment payments. These mechanisms help ensure the financial feasibility of the purchase and limit the impact on the corporation's cash flow. Different types of Phoenix Arizona Stock Agreement — Buy Sell Agreement between Shareholders and Corporation include: 1. Cross-Purchase Agreement: In this type of agreement, individual shareholders agree to purchase the shares of a departing or deceased shareholder directly from that shareholder or their estate. Each shareholder takes on the responsibility of purchasing the proportional amount of shares. 2. Redemption Agreement: This agreement involves the corporation itself purchasing the shares from a departing shareholder. The corporation may use its own funds or obtain financing for this purpose. 3. Hybrid Agreement: A hybrid agreement combines elements of both cross-purchase and redemption agreements, offering flexibility in determining the purchase process for different scenarios. It may involve a combination of individual shareholder purchases and the corporation's buyback of shares. In conclusion, the Phoenix Arizona Stock Agreement — Buy Sell Agreement between Shareholders and Corporation serves as a vital document that establishes a clear framework for the sale and purchase of shares, protecting the interests of shareholders and the corporation in various circumstances. It is advisable for corporations and shareholders in Phoenix, Arizona, to consult legal professionals experienced in corporate law to draft a comprehensive agreement tailored to their specific requirements and objectives.Phoenix Arizona Stock Agreement — Buy Sell Agreement between Shareholders and Corporation A stock agreement, also known as a buy-sell agreement, is a legally binding contract that outlines the terms and conditions for the sale and purchase of stocks between shareholders of a corporation in Phoenix, Arizona. This agreement is crucial for protecting the interests of both shareholders and the corporation, establishing a framework in the event of various scenarios, including the death, disability, retirement, or voluntary exit of a shareholder. The Phoenix Arizona Stock Agreement — Buy Sell Agreement between Shareholders and Corporation typically includes key provisions addressing the following aspects: 1. Share Purchase Option: This provision outlines the circumstances triggering the sale of shares, including death, disability, voluntary exit, or retirement of a shareholder. It also determines the conditions and processes for exercising the purchase option. 2. Valuation: A stock agreement should specify the method of valuating shares, such as using a predetermined formula, independent appraisal, or mutually agreed-upon valuation experts. This provision ensures fairness in determining the price of shares during the buy-sell process. 3. Right of First Refusal: This provision grants existing shareholders the right to purchase the shares offered for sale before other parties. It helps to maintain the ownership structure of the corporation by preventing unwanted third-party ownership. 4. Mandatory Purchase Provision: In certain cases, such as a shareholder's retirement or disability, this provision requires the corporation or the remaining shareholders to purchase the shares from the exiting shareholder. This provision ensures a smooth transition and protects the departing shareholder's financial interests. 5. Funding Mechanisms: A stock agreement may include funding mechanisms to facilitate the purchase of shares, such as using life or disability insurance policies, company funds, or installment payments. These mechanisms help ensure the financial feasibility of the purchase and limit the impact on the corporation's cash flow. Different types of Phoenix Arizona Stock Agreement — Buy Sell Agreement between Shareholders and Corporation include: 1. Cross-Purchase Agreement: In this type of agreement, individual shareholders agree to purchase the shares of a departing or deceased shareholder directly from that shareholder or their estate. Each shareholder takes on the responsibility of purchasing the proportional amount of shares. 2. Redemption Agreement: This agreement involves the corporation itself purchasing the shares from a departing shareholder. The corporation may use its own funds or obtain financing for this purpose. 3. Hybrid Agreement: A hybrid agreement combines elements of both cross-purchase and redemption agreements, offering flexibility in determining the purchase process for different scenarios. It may involve a combination of individual shareholder purchases and the corporation's buyback of shares. In conclusion, the Phoenix Arizona Stock Agreement — Buy Sell Agreement between Shareholders and Corporation serves as a vital document that establishes a clear framework for the sale and purchase of shares, protecting the interests of shareholders and the corporation in various circumstances. It is advisable for corporations and shareholders in Phoenix, Arizona, to consult legal professionals experienced in corporate law to draft a comprehensive agreement tailored to their specific requirements and objectives.
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.
