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.
Missouri Stock Agreement, also known as a Buy-Sell Agreement between Shareholders and Corporation, is a legal document that outlines the terms and conditions regarding the purchase and sale of shares between shareholders of a corporation. It serves as a binding contract that governs the process of transferring ownership and helps provide a fair and structured procedure in case of certain triggering events such as the death, disability, retirement, or voluntary departure of a shareholder. The Missouri Stock Agreement contains various key provisions to protect both the corporation and its shareholders. These provisions typically include: 1. Purchase and Sale of Shares: The agreement sets out the terms and conditions for the sale and purchase of shares in the event of a triggering event. It outlines how the shares will be valued, the process for determining the purchase price, and the timeframe within which the transaction must be completed. 2. Right of First Refusal: This provision grants existing shareholders the first opportunity to purchase the shares of a departing shareholder before they can be sold to an external party. It ensures that ownership remains within the corporation's existing pool of shareholders. 3. Valuation of Shares: The agreement specifies the method of valuing the shares during a triggering event. Common methods include book value, fair market value, or a predetermined formula. This ensures a fair and agreed-upon price for the shares. 4. Funding Mechanism: The agreement also addresses the financing of the share purchase. It may include provisions for financing options, such as life insurance policies or agreed-upon installment payments, to facilitate the buyout process. 5. Non-Compete and Non-Disclosure clauses: To protect the interests of the corporation, the agreement may include non-compete and non-disclosure clauses that restrict departing shareholders from competing with the corporation or disclosing proprietary information to competitors. There are various types of Missouri Stock Agreements — Buy-Sell Agreements that cater to different situations and shareholders' needs: 1. Cross-purchase Agreement: In this type of agreement, each individual shareholder has the option to purchase the shares of a departing shareholder directly. This arrangement is commonly used in smaller corporations with a limited number of shareholders. 2. Stock Redemption Agreement: In a stock redemption agreement, the corporation itself agrees to repurchase the shares of a departing shareholder. This type of agreement is often preferred in larger corporations or when there is a significant disparity in ownership percentages among the shareholders. 3. Hybrid Agreement: A hybrid agreement combines elements of both the cross-purchase and stock redemption agreements. It provides flexibility by allowing certain shareholders to directly purchase shares while the corporation may also have the option to buy back shares. Overall, a Missouri Stock Agreement — Buy-Sell Agreement provides a framework for a smooth transition of ownership in a corporation, ensuring fairness and protecting the interests of both shareholders and the corporation itself. It is crucial for shareholders to consult with legal professionals specializing in corporate law to draft a comprehensive agreement tailored to their specific needs and circumstances.Missouri Stock Agreement, also known as a Buy-Sell Agreement between Shareholders and Corporation, is a legal document that outlines the terms and conditions regarding the purchase and sale of shares between shareholders of a corporation. It serves as a binding contract that governs the process of transferring ownership and helps provide a fair and structured procedure in case of certain triggering events such as the death, disability, retirement, or voluntary departure of a shareholder. The Missouri Stock Agreement contains various key provisions to protect both the corporation and its shareholders. These provisions typically include: 1. Purchase and Sale of Shares: The agreement sets out the terms and conditions for the sale and purchase of shares in the event of a triggering event. It outlines how the shares will be valued, the process for determining the purchase price, and the timeframe within which the transaction must be completed. 2. Right of First Refusal: This provision grants existing shareholders the first opportunity to purchase the shares of a departing shareholder before they can be sold to an external party. It ensures that ownership remains within the corporation's existing pool of shareholders. 3. Valuation of Shares: The agreement specifies the method of valuing the shares during a triggering event. Common methods include book value, fair market value, or a predetermined formula. This ensures a fair and agreed-upon price for the shares. 4. Funding Mechanism: The agreement also addresses the financing of the share purchase. It may include provisions for financing options, such as life insurance policies or agreed-upon installment payments, to facilitate the buyout process. 5. Non-Compete and Non-Disclosure clauses: To protect the interests of the corporation, the agreement may include non-compete and non-disclosure clauses that restrict departing shareholders from competing with the corporation or disclosing proprietary information to competitors. There are various types of Missouri Stock Agreements — Buy-Sell Agreements that cater to different situations and shareholders' needs: 1. Cross-purchase Agreement: In this type of agreement, each individual shareholder has the option to purchase the shares of a departing shareholder directly. This arrangement is commonly used in smaller corporations with a limited number of shareholders. 2. Stock Redemption Agreement: In a stock redemption agreement, the corporation itself agrees to repurchase the shares of a departing shareholder. This type of agreement is often preferred in larger corporations or when there is a significant disparity in ownership percentages among the shareholders. 3. Hybrid Agreement: A hybrid agreement combines elements of both the cross-purchase and stock redemption agreements. It provides flexibility by allowing certain shareholders to directly purchase shares while the corporation may also have the option to buy back shares. Overall, a Missouri Stock Agreement — Buy-Sell Agreement provides a framework for a smooth transition of ownership in a corporation, ensuring fairness and protecting the interests of both shareholders and the corporation itself. It is crucial for shareholders to consult with legal professionals specializing in corporate law to draft a comprehensive agreement tailored to their specific needs and circumstances.
