North Carolina 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. North Carolina Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance is a legal document that outlines the terms and conditions of buying or selling common stock in a closely held corporation in North Carolina. The agreement also includes provisions for funding the purchase through life insurance. This agreement is specifically designed for closely held corporations, where the shares of common stock are not publicly traded and are held by a limited number of individuals or entities. It is a crucial document for maintaining the integrity and continuity of the corporation in cases of death, disability, retirement, or other triggering events of a shareholder. The agreement typically contains several key provisions, including: 1. Purchase and Sale Terms: The agreement identifies the buyer(s) and seller(s) of the common stock, the number of shares to be bought or sold, and the purchase price or valuation method. It outlines the payment terms, such as lump sum or installment payments, and the timeline for completing the transaction. 2. Triggering Events: The agreement specifies the events that trigger the purchase or sale of the common stock. These events could include the death, disability, retirement, resignation, or bankruptcy of a shareholder. The agreement ensures a smooth transition of ownership when such events occur. 3. Valuation Method: The agreement outlines the method for valuing the common stock, typically based on predetermined factors or agreed-upon formulas. This ensures a fair and unbiased valuation of the shares to determine the purchase price. 4. Option to Fund Purchase through Life Insurance: This provision allows shareholders to fund the purchase of common stock through life insurance policies. In this case, the shareholder(s) typically maintain life insurance policies on each other's lives. Upon the occurrence of a triggering event, the proceeds from the insurance policies are used to fund the purchase of the stock. This option provides liquidity to the corporation and ensures a smooth transfer of ownership without burdening the remaining shareholders with significant financial obligations. 5. Dispute Resolution: The agreement may include provisions for resolving disputes among shareholders, such as mediation or arbitration. This ensures a peaceful and efficient resolution of any conflicts that may arise during the purchase or sale process. It is important to note that there may be variations of the North Carolina Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance based on the specific needs and agreements of the parties involved. Some variations may include different valuation methods, payment terms, or triggering events specific to the shareholders' circumstances. However, the core purpose of the agreement remains the same — to establish a framework for the orderly transfer of common stock ownership in a closely held corporation in North Carolina, while providing an option to fund the purchase through life insurance.

North Carolina Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance is a legal document that outlines the terms and conditions of buying or selling common stock in a closely held corporation in North Carolina. The agreement also includes provisions for funding the purchase through life insurance. This agreement is specifically designed for closely held corporations, where the shares of common stock are not publicly traded and are held by a limited number of individuals or entities. It is a crucial document for maintaining the integrity and continuity of the corporation in cases of death, disability, retirement, or other triggering events of a shareholder. The agreement typically contains several key provisions, including: 1. Purchase and Sale Terms: The agreement identifies the buyer(s) and seller(s) of the common stock, the number of shares to be bought or sold, and the purchase price or valuation method. It outlines the payment terms, such as lump sum or installment payments, and the timeline for completing the transaction. 2. Triggering Events: The agreement specifies the events that trigger the purchase or sale of the common stock. These events could include the death, disability, retirement, resignation, or bankruptcy of a shareholder. The agreement ensures a smooth transition of ownership when such events occur. 3. Valuation Method: The agreement outlines the method for valuing the common stock, typically based on predetermined factors or agreed-upon formulas. This ensures a fair and unbiased valuation of the shares to determine the purchase price. 4. Option to Fund Purchase through Life Insurance: This provision allows shareholders to fund the purchase of common stock through life insurance policies. In this case, the shareholder(s) typically maintain life insurance policies on each other's lives. Upon the occurrence of a triggering event, the proceeds from the insurance policies are used to fund the purchase of the stock. This option provides liquidity to the corporation and ensures a smooth transfer of ownership without burdening the remaining shareholders with significant financial obligations. 5. Dispute Resolution: The agreement may include provisions for resolving disputes among shareholders, such as mediation or arbitration. This ensures a peaceful and efficient resolution of any conflicts that may arise during the purchase or sale process. It is important to note that there may be variations of the North Carolina Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance based on the specific needs and agreements of the parties involved. Some variations may include different valuation methods, payment terms, or triggering events specific to the shareholders' circumstances. However, the core purpose of the agreement remains the same — to establish a framework for the orderly transfer of common stock ownership in a closely held corporation in North Carolina, while providing an option to fund the purchase through life insurance.