Michigan Buy Sell Agreement Between Shareholders and a Corporation

• Category: Contracts - Buy Sell - Stock Purchases
• State: Multi-State
• Control #: US-00442
• Format: Word; Rich Text

Description

The purpose of this agreement is to provide for the sale by a stockholder during his/her lifetime, or by a deceased stockholder's estate, and to provide all or a substantial part of the funds for the purchase. The form contains the following provisions: total value of the capital stock, procedure upon the death of a stockholder, and amending procedures for the agreement. A Michigan Buy Sell Agreement Between Shareholders and a Corporation is a legal contract that outlines the terms and conditions for the buying and selling of shares between shareholders of a corporation in the state of Michigan. This agreement helps in providing a clear and structured process for the transfer of ownership in a corporation. The agreement typically includes the following key elements: 1. Parties: It identifies the shareholders (both buyers and sellers) involved in the transaction and provides their details, including full names, addresses, and number of shares owned. 2. Purchase Price: The agreement outlines the method of determining the purchase price of the shares being sold, whether it is a fixed price, fair market value, or calculated based on a predetermined formula. 3. Restriction: It may include restrictions on the transfer of shares to ensure that the shares are not sold to outsiders or competitors without the approval of other shareholders or the corporation itself. These restrictions will help maintain control and ownership within the existing shareholders. 4. Rights of First Refusal: This provision allows existing shareholders to have the first option to purchase the shares being sold before they are offered to any third parties. This helps in maintaining the ownership structure and ensuring that shareholders have the opportunity to maintain control in the corporation. 5. Triggering Events: The agreement will specify the triggering events that can activate the buy-sell provision, such as death, disability, retirement, bankruptcy, divorce, or termination of employment. These events are essential as they serve as a mechanism to determine when a shareholder can or must sell their shares. 6. Payment Terms: It outlines the payment terms, such as the timing and method of payment, including options for cash, promissory notes, or installment payments. 7. Dispute Resolution: The agreement may include a provision for resolving any disputes arising from the agreement, such as mediation, arbitration, or litigation. This helps ensure a fair and efficient resolution process in case of conflicts between shareholders. 8. Successors and Assigns: This section clarifies whether the agreement will be binding upon the successors and assigns of the shareholders, allowing for a smooth transition of ownership in the event of death or transfer of shares. Some different types of Michigan Buy Sell Agreements Between Shareholders and a Corporation include: 1. Cross-Purchase Agreement: In this agreement, each shareholder has an individual agreement with every other shareholder, and upon the occurrence of a triggering event, the remaining shareholders will purchase the shares of the departing shareholder directly from them. 2. Entity Purchase Agreement: In this agreement, the corporation itself is a party to the agreement. The corporation buys the shares from the departing shareholder. 3. Wait-and-See Agreement: This agreement allows the surviving shareholders or the corporation to choose between a cross-purchase or entity purchase agreement when a triggering event occurs. These various types of agreements provide flexibility and allow shareholders to choose the structure that best suits their needs and circumstances. It is recommended to consult with legal professionals to ensure the agreement accurately reflects the intentions and requirements of the shareholders and complies with Michigan corporation laws.

A Michigan Buy Sell Agreement Between Shareholders and a Corporation is a legal contract that outlines the terms and conditions for the buying and selling of shares between shareholders of a corporation in the state of Michigan. This agreement helps in providing a clear and structured process for the transfer of ownership in a corporation. The agreement typically includes the following key elements: 1. Parties: It identifies the shareholders (both buyers and sellers) involved in the transaction and provides their details, including full names, addresses, and number of shares owned. 2. Purchase Price: The agreement outlines the method of determining the purchase price of the shares being sold, whether it is a fixed price, fair market value, or calculated based on a predetermined formula. 3. Restriction: It may include restrictions on the transfer of shares to ensure that the shares are not sold to outsiders or competitors without the approval of other shareholders or the corporation itself. These restrictions will help maintain control and ownership within the existing shareholders. 4. Rights of First Refusal: This provision allows existing shareholders to have the first option to purchase the shares being sold before they are offered to any third parties. This helps in maintaining the ownership structure and ensuring that shareholders have the opportunity to maintain control in the corporation. 5. Triggering Events: The agreement will specify the triggering events that can activate the buy-sell provision, such as death, disability, retirement, bankruptcy, divorce, or termination of employment. These events are essential as they serve as a mechanism to determine when a shareholder can or must sell their shares. 6. Payment Terms: It outlines the payment terms, such as the timing and method of payment, including options for cash, promissory notes, or installment payments. 7. Dispute Resolution: The agreement may include a provision for resolving any disputes arising from the agreement, such as mediation, arbitration, or litigation. This helps ensure a fair and efficient resolution process in case of conflicts between shareholders. 8. Successors and Assigns: This section clarifies whether the agreement will be binding upon the successors and assigns of the shareholders, allowing for a smooth transition of ownership in the event of death or transfer of shares. Some different types of Michigan Buy Sell Agreements Between Shareholders and a Corporation include: 1. Cross-Purchase Agreement: In this agreement, each shareholder has an individual agreement with every other shareholder, and upon the occurrence of a triggering event, the remaining shareholders will purchase the shares of the departing shareholder directly from them. 2. Entity Purchase Agreement: In this agreement, the corporation itself is a party to the agreement. The corporation buys the shares from the departing shareholder. 3. Wait-and-See Agreement: This agreement allows the surviving shareholders or the corporation to choose between a cross-purchase or entity purchase agreement when a triggering event occurs. These various types of agreements provide flexibility and allow shareholders to choose the structure that best suits their needs and circumstances. It is recommended to consult with legal professionals to ensure the agreement accurately reflects the intentions and requirements of the shareholders and complies with Michigan corporation laws.

Law summary