Arkansas Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance

• Category: Contracts - Buy Sell - Stock Purchases
• State: Multi-State
• Control #: US-00455BG
• Format: Word; Rich Text

Description

This form is set up as a Buy Sell Agreement between the Corporation and a key shareholder. It applies in the case of the death, disability, retirement or offer of shareholder to sell the stock during his lifetime. A Buy Sell or Stock Purchase Agreement, specifically relating to common stock in a closely held corporation, is a legal document that outlines the terms and conditions for the sale and purchase of shares in the corporation. This agreement also provides an option to fund the purchase of stock through a life insurance policy. In the state of Arkansas, there may be different types of Buy Sell or Stock Purchase Agreements that cover common stock in closely held corporations with the option to fund the purchase through life insurance. These types can include: 1. Cross-Purchase Agreement: In this type of agreement, each shareholder agrees to buy the stock of a deceased or departing shareholder. The life insurance policy is taken out on the life of each individual shareholder, and the proceeds from the policy are then used to fund the purchase of the stock. 2. Entity-Purchase Agreement: In this type of agreement, the corporation itself agrees to buy the stock of a deceased or departing shareholder. The life insurance policy is taken out on the lives of each individual shareholder, and the corporation is the beneficiary of the policies. The corporation then uses the proceeds from the policies to fund the purchase of the stock. The Arkansas Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance typically includes the following key provisions: 1. Identification of Parties: The agreement will identify the closely held corporation and all shareholders participating in the agreement. 2. Triggering Events: The agreement will outline the events that trigger the sale of stock, such as death, disability, retirement, or voluntary departure. 3. Purchase Price: The agreement will establish the method for determining the purchase price of the stock, whether it be through a predetermined formula, appraisal, or negotiation between the parties. 4. Funding Mechanism: The agreement will include provisions detailing the use of life insurance policies to fund the stock purchase. It will specify the amount of coverage and the individual shareholders on whom the policies will be taken out. 5. Payment Terms: The agreement will outline the terms of payment for the purchase of the stock, including the timing, method, and installment options, if applicable. 6. Terms of Stock Transfer: The agreement will specify the terms and conditions under which the stock is transferred from the selling shareholder to the buying shareholder or the corporation. 7. Governing Law: The agreement will identify that it is governed by the laws of the state of Arkansas. It is important to consult with legal professionals familiar with Arkansas laws to ensure compliance and to tailor the agreement to the specific requirements of the closely held corporation and its shareholders.

A Buy Sell or Stock Purchase Agreement, specifically relating to common stock in a closely held corporation, is a legal document that outlines the terms and conditions for the sale and purchase of shares in the corporation. This agreement also provides an option to fund the purchase of stock through a life insurance policy. In the state of Arkansas, there may be different types of Buy Sell or Stock Purchase Agreements that cover common stock in closely held corporations with the option to fund the purchase through life insurance. These types can include: 1. Cross-Purchase Agreement: In this type of agreement, each shareholder agrees to buy the stock of a deceased or departing shareholder. The life insurance policy is taken out on the life of each individual shareholder, and the proceeds from the policy are then used to fund the purchase of the stock. 2. Entity-Purchase Agreement: In this type of agreement, the corporation itself agrees to buy the stock of a deceased or departing shareholder. The life insurance policy is taken out on the lives of each individual shareholder, and the corporation is the beneficiary of the policies. The corporation then uses the proceeds from the policies to fund the purchase of the stock. The Arkansas Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance typically includes the following key provisions: 1. Identification of Parties: The agreement will identify the closely held corporation and all shareholders participating in the agreement. 2. Triggering Events: The agreement will outline the events that trigger the sale of stock, such as death, disability, retirement, or voluntary departure. 3. Purchase Price: The agreement will establish the method for determining the purchase price of the stock, whether it be through a predetermined formula, appraisal, or negotiation between the parties. 4. Funding Mechanism: The agreement will include provisions detailing the use of life insurance policies to fund the stock purchase. It will specify the amount of coverage and the individual shareholders on whom the policies will be taken out. 5. Payment Terms: The agreement will outline the terms of payment for the purchase of the stock, including the timing, method, and installment options, if applicable. 6. Terms of Stock Transfer: The agreement will specify the terms and conditions under which the stock is transferred from the selling shareholder to the buying shareholder or the corporation. 7. Governing Law: The agreement will identify that it is governed by the laws of the state of Arkansas. It is important to consult with legal professionals familiar with Arkansas laws to ensure compliance and to tailor the agreement to the specific requirements of the closely held corporation and its shareholders.