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 New Hampshire Stock Agreement, also known as a Buy-Sell Agreement between Shareholders and Corporation, is a legal document that outlines the terms and conditions governing the buying and selling of corporate shares within a corporation based in New Hampshire. This agreement is crucial for protecting the interests of both shareholders and the corporation itself in the event of certain triggering events such as the death, disability, retirement, or voluntary/involuntary exit of a shareholder. The New Hampshire Stock Agreement — Buy Sell Agreement between Shareholders and Corporation typically contains several key provisions, including: 1. Purchase Price: The agreement specifies the method of determining the purchase price for the shares, ensuring a fair valuation process in case of a triggering event. This may involve an agreed-upon formula, independent appraisal, or other mutually acceptable pricing mechanism. 2. Triggering Events: The agreement lists the events that will trigger a buy-sell transaction, such as death, disability, retirement, or voluntary/involuntary exit of a shareholder. It ensures that the remaining shareholders and/or the corporation have the option to purchase the departing shareholder's shares. 3. Restrictions on Transfer: The agreement may include restrictions on the transferability of shares to maintain control over ownership within the corporation and prevent shares from falling into the wrong hands. 4. Right of First Refusal: This provision gives the corporation and/or existing shareholders the right to purchase the departing shareholder's shares before they can be offered to any outside parties. 5. Funding Mechanisms: The agreement outlines the funding sources for the share purchase, including options such as cash, installment payments, life insurance policies, or loans. 6. Terms of Payment: The agreement defines the terms of payment, including the duration, interest rates, and potential collateral securing the payment obligations. 7. Dispute Resolution: It may include provisions for resolving disputes arising from the stock agreement, such as arbitration or mediation, to avoid costly litigation. Different types of New Hampshire Stock Agreement — Buy-Sell Agreement between Shareholders and Corporation may include variations to cater to specific circumstances or preferences of the parties involved. Some possible variations include: 1. Stock Redemption Agreement: This type of agreement allows the corporation itself to repurchase the shares from the departing shareholder, thereby reducing the total number of outstanding shares. 2. Cross-Purchase Agreement: In this arrangement, the remaining shareholders agree to purchase the shares directly from the exiting shareholder rather than the corporation repurchasing them. 3. Hybrid Agreement: This type combines elements of both the Stock Redemption Agreement and the Cross-Purchase Agreement, enabling the corporation and remaining shareholders to buy back some shares while other shareholders directly purchase the remaining shares. In conclusion, a New Hampshire Stock Agreement — Buy Sell Agreement between Shareholders and Corporation is a vital legal instrument that protects the interests of shareholders and the corporation during triggering events. By clearly defining the terms of share purchase and outlining the rights and obligations of the parties involved, this agreement ensures a smooth transition while minimizing potential conflicts or disruptions within the corporation.A New Hampshire Stock Agreement, also known as a Buy-Sell Agreement between Shareholders and Corporation, is a legal document that outlines the terms and conditions governing the buying and selling of corporate shares within a corporation based in New Hampshire. This agreement is crucial for protecting the interests of both shareholders and the corporation itself in the event of certain triggering events such as the death, disability, retirement, or voluntary/involuntary exit of a shareholder. The New Hampshire Stock Agreement — Buy Sell Agreement between Shareholders and Corporation typically contains several key provisions, including: 1. Purchase Price: The agreement specifies the method of determining the purchase price for the shares, ensuring a fair valuation process in case of a triggering event. This may involve an agreed-upon formula, independent appraisal, or other mutually acceptable pricing mechanism. 2. Triggering Events: The agreement lists the events that will trigger a buy-sell transaction, such as death, disability, retirement, or voluntary/involuntary exit of a shareholder. It ensures that the remaining shareholders and/or the corporation have the option to purchase the departing shareholder's shares. 3. Restrictions on Transfer: The agreement may include restrictions on the transferability of shares to maintain control over ownership within the corporation and prevent shares from falling into the wrong hands. 4. Right of First Refusal: This provision gives the corporation and/or existing shareholders the right to purchase the departing shareholder's shares before they can be offered to any outside parties. 5. Funding Mechanisms: The agreement outlines the funding sources for the share purchase, including options such as cash, installment payments, life insurance policies, or loans. 6. Terms of Payment: The agreement defines the terms of payment, including the duration, interest rates, and potential collateral securing the payment obligations. 7. Dispute Resolution: It may include provisions for resolving disputes arising from the stock agreement, such as arbitration or mediation, to avoid costly litigation. Different types of New Hampshire Stock Agreement — Buy-Sell Agreement between Shareholders and Corporation may include variations to cater to specific circumstances or preferences of the parties involved. Some possible variations include: 1. Stock Redemption Agreement: This type of agreement allows the corporation itself to repurchase the shares from the departing shareholder, thereby reducing the total number of outstanding shares. 2. Cross-Purchase Agreement: In this arrangement, the remaining shareholders agree to purchase the shares directly from the exiting shareholder rather than the corporation repurchasing them. 3. Hybrid Agreement: This type combines elements of both the Stock Redemption Agreement and the Cross-Purchase Agreement, enabling the corporation and remaining shareholders to buy back some shares while other shareholders directly purchase the remaining shares. In conclusion, a New Hampshire Stock Agreement — Buy Sell Agreement between Shareholders and Corporation is a vital legal instrument that protects the interests of shareholders and the corporation during triggering events. By clearly defining the terms of share purchase and outlining the rights and obligations of the parties involved, this agreement ensures a smooth transition while minimizing potential conflicts or disruptions within the corporation.
