Kansas Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• Control #: US-02569BG
• 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. 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 Kansas Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a legally binding contract that outlines the rights, responsibilities, and obligations of the shareholders in a closely held corporation based in the state of Kansas. This agreement governs the relationship between the two shareholders and provides a framework for resolving disputes, protecting the interests of both parties, and establishing procedures for the potential buy and sell of shares. The agreement typically includes essential clauses such as the purpose of the agreement, definitions of key terms, the ownership and percentage of shares held by each shareholder, responsibilities and management roles of each shareholder, voting rights, decision-making processes, methods for resolving disagreements and disputes, restrictions on transferring shares to third parties, and provisions for the buy and sell of shares. In the context of buy-sell provisions, there are different types of Kansas Shareholders' Agreement between Two Shareholders of Closely Held Corporation: 1. Shotgun Provision: This provision allows one shareholder to offer a specific price and terms to the other shareholder for the purchase of their shares. The other shareholder has the choice either to accept the offer and sell their shares at that price or to counter-offer with different terms and purchase the shares of the initiating shareholder at the proposed price. 2. Right of First Refusal: This provision grants one shareholder the first opportunity to purchase any shares that the other shareholder wishes to sell. If the first shareholder declines the offer, the selling shareholder is then free to sell their shares to a third party. 3. Put Option: In this provision, one shareholder has the right to "put" their shares for sale at a predetermined price. The other shareholder is then obligated to purchase these shares at the specified price. 4. Call Option: The call option provision gives one shareholder the right to "call" for the purchase of the other shareholder's shares at a predetermined price and terms. By including these buy-sell provisions within a Kansas Shareholders' Agreement, the shareholders can establish a fair and predetermined process for the potential sale or transfer of shares, which can help prevent disputes and maintain the stability of the closely held corporation. It provides a clear framework for valuing shares and situations where one or both shareholders may wish to exit the business. In summary, a Kansas Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a crucial legal document that sets out the rights and obligations of shareholders, provides mechanisms for dispute resolution, and facilitates the potential buy and sell of shares within the closely held corporation.

A Kansas Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a legally binding contract that outlines the rights, responsibilities, and obligations of the shareholders in a closely held corporation based in the state of Kansas. This agreement governs the relationship between the two shareholders and provides a framework for resolving disputes, protecting the interests of both parties, and establishing procedures for the potential buy and sell of shares. The agreement typically includes essential clauses such as the purpose of the agreement, definitions of key terms, the ownership and percentage of shares held by each shareholder, responsibilities and management roles of each shareholder, voting rights, decision-making processes, methods for resolving disagreements and disputes, restrictions on transferring shares to third parties, and provisions for the buy and sell of shares. In the context of buy-sell provisions, there are different types of Kansas Shareholders' Agreement between Two Shareholders of Closely Held Corporation: 1. Shotgun Provision: This provision allows one shareholder to offer a specific price and terms to the other shareholder for the purchase of their shares. The other shareholder has the choice either to accept the offer and sell their shares at that price or to counter-offer with different terms and purchase the shares of the initiating shareholder at the proposed price. 2. Right of First Refusal: This provision grants one shareholder the first opportunity to purchase any shares that the other shareholder wishes to sell. If the first shareholder declines the offer, the selling shareholder is then free to sell their shares to a third party. 3. Put Option: In this provision, one shareholder has the right to "put" their shares for sale at a predetermined price. The other shareholder is then obligated to purchase these shares at the specified price. 4. Call Option: The call option provision gives one shareholder the right to "call" for the purchase of the other shareholder's shares at a predetermined price and terms. By including these buy-sell provisions within a Kansas Shareholders' Agreement, the shareholders can establish a fair and predetermined process for the potential sale or transfer of shares, which can help prevent disputes and maintain the stability of the closely held corporation. It provides a clear framework for valuing shares and situations where one or both shareholders may wish to exit the business. In summary, a Kansas Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a crucial legal document that sets out the rights and obligations of shareholders, provides mechanisms for dispute resolution, and facilitates the potential buy and sell of shares within the closely held corporation.