Florida Buy-Sell Agreement between Two Shareholders of Closely Held Corporation

• Category: Corporations - Contracts
• State: Multi-State
• Control #: US-02553BG
• Format: Word; Rich Text

Description

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. The Florida Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation is a legally binding document that outlines the terms and conditions under which the shares of a corporation can be bought or sold between the existing shareholders. This agreement ensures a smooth transition of ownership and protects the interests of both parties involved. Keywords: Florida, Buy-Sell Agreement, Two Shareholders, Closely Held Corporation, legally binding, terms and conditions, shares, bought, sold, existing shareholders, ownership, interests, transition. There are different types of Florida Buy-Sell Agreements between Two Shareholders of a Closely Held Corporation, namely: 1. Cross-Purchase Agreement: This type of agreement allows each shareholder to purchase the shares of the other shareholder in the event of certain triggering events, such as death, disability, retirement, or voluntary exit from the business. The purchase price is usually determined by a prepared formula or appraisal. 2. Stock Redemption Agreement: In this type of agreement, the corporation agrees to redeem the shares of a shareholder upon the occurrence of a triggering event. The corporation uses its own funds or acquires insurance to fund the buyout. The redeemed shares are then canceled, reducing the overall number of outstanding shares. 3. Hybrid Agreement: A hybrid agreement combines elements of both the cross-purchase and stock redemption agreements. It allows both the individual shareholders and the corporation to have the option to buy the shares of the departing shareholder, depending on the nature of the triggering event. 4. Wait-and-See Agreement: This type of agreement defers the decision on whether the individual shareholders or the corporation will purchase the shares until the actual occurrence of a triggering event. It provides flexibility and allows the parties to evaluate the situation at the time of the event. Regardless of the type of agreement, it is important to consult with a qualified attorney specializing in corporate law to draft a Buy-Sell Agreement that conforms to Florida state laws and addresses the specific needs and circumstances of the shareholders and the closely held corporation. In conclusion, the Florida Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation is a vital document that governs the transfer of shares in the corporation. Different types of agreements, such as cross-purchase, stock redemption, hybrid, and wait-and-see, offer various approaches to determining how shares will be bought or sold. Seeking legal advice ensures that the agreement is tailored to meet the unique requirements of the shareholders and complies with state regulations.

The Florida Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation is a legally binding document that outlines the terms and conditions under which the shares of a corporation can be bought or sold between the existing shareholders. This agreement ensures a smooth transition of ownership and protects the interests of both parties involved. Keywords: Florida, Buy-Sell Agreement, Two Shareholders, Closely Held Corporation, legally binding, terms and conditions, shares, bought, sold, existing shareholders, ownership, interests, transition. There are different types of Florida Buy-Sell Agreements between Two Shareholders of a Closely Held Corporation, namely: 1. Cross-Purchase Agreement: This type of agreement allows each shareholder to purchase the shares of the other shareholder in the event of certain triggering events, such as death, disability, retirement, or voluntary exit from the business. The purchase price is usually determined by a prepared formula or appraisal. 2. Stock Redemption Agreement: In this type of agreement, the corporation agrees to redeem the shares of a shareholder upon the occurrence of a triggering event. The corporation uses its own funds or acquires insurance to fund the buyout. The redeemed shares are then canceled, reducing the overall number of outstanding shares. 3. Hybrid Agreement: A hybrid agreement combines elements of both the cross-purchase and stock redemption agreements. It allows both the individual shareholders and the corporation to have the option to buy the shares of the departing shareholder, depending on the nature of the triggering event. 4. Wait-and-See Agreement: This type of agreement defers the decision on whether the individual shareholders or the corporation will purchase the shares until the actual occurrence of a triggering event. It provides flexibility and allows the parties to evaluate the situation at the time of the event. Regardless of the type of agreement, it is important to consult with a qualified attorney specializing in corporate law to draft a Buy-Sell Agreement that conforms to Florida state laws and addresses the specific needs and circumstances of the shareholders and the closely held corporation. In conclusion, the Florida Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation is a vital document that governs the transfer of shares in the corporation. Different types of agreements, such as cross-purchase, stock redemption, hybrid, and wait-and-see, offer various approaches to determining how shares will be bought or sold. Seeking legal advice ensures that the agreement is tailored to meet the unique requirements of the shareholders and complies with state regulations.