New Mexico 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 New Mexico Buy Sell Agreement Between Shareholders and a Corporation is a legally binding contract that outlines the terms and conditions surrounding the sale or transfer of shares within a corporation. This agreement is crucial for protecting the interests of shareholders and ensuring a smooth transition of ownership in the event of certain triggering events. The primary purpose of a Buy Sell Agreement is to establish a framework for a shareholder to sell or transfer their shares in a corporation. This agreement can be triggered by various events, such as the death, disability, retirement, or voluntary sale of shares by a shareholder. By providing predetermined rules and procedures, the agreement helps prevent disputes and ensures a fair market value for the shares. There are different types of Buy Sell Agreements in New Mexico that shareholders and corporations can consider depending on their specific needs and circumstances. Some common types include: 1. Cross-Purchase Agreement: This type of agreement involves the remaining shareholders purchasing the shares of a departing or deceased shareholder. The remaining shareholders agree to buy the shares in proportion to their ownership in the corporation. 2. Stock Redemption Agreement: In this agreement, the corporation itself agrees to repurchase the shares of a departing or deceased shareholder. The corporation uses its own funds or borrows money to finance the purchase. 3. Hybrid Agreement: A combination of both the cross-purchase and stock redemption agreements, this type allows both the shareholders and the corporation to purchase shares. Key provisions found in a New Mexico Buy Sell Agreement include: 1. Purchase Price: The agreement should outline the method of determining the purchase price, which could be based on fair market value, book value, or a predetermined formula. 2. Triggering Events: The agreement must identify the specific events that will trigger the buyout, such as death, disability, retirement, voluntary sale, or bankruptcy. 3. Right of First Refusal: This provision grants the corporation or other shareholders the first opportunity to purchase the shares before they can be sold to an outside party. 4. Terms of Payment: The agreement needs to specify how the purchase price will be paid, whether in a lump sum, installments, or through financing arrangements. 5. Non-Compete and Confidentiality Clauses: These clauses may be included to prevent departing shareholders from competing with the corporation or disclosing sensitive information. 6. Dispute Resolution: The agreement should outline the process for resolving disputes, such as through mediation or arbitration. It is essential to consult with legal professionals specializing in corporate law when drafting or entering into a Buy Sell Agreement in New Mexico. They will ensure that the agreement is in accordance with state laws and tailored to the specific needs of the shareholders and the corporation.

A New Mexico Buy Sell Agreement Between Shareholders and a Corporation is a legally binding contract that outlines the terms and conditions surrounding the sale or transfer of shares within a corporation. This agreement is crucial for protecting the interests of shareholders and ensuring a smooth transition of ownership in the event of certain triggering events. The primary purpose of a Buy Sell Agreement is to establish a framework for a shareholder to sell or transfer their shares in a corporation. This agreement can be triggered by various events, such as the death, disability, retirement, or voluntary sale of shares by a shareholder. By providing predetermined rules and procedures, the agreement helps prevent disputes and ensures a fair market value for the shares. There are different types of Buy Sell Agreements in New Mexico that shareholders and corporations can consider depending on their specific needs and circumstances. Some common types include: 1. Cross-Purchase Agreement: This type of agreement involves the remaining shareholders purchasing the shares of a departing or deceased shareholder. The remaining shareholders agree to buy the shares in proportion to their ownership in the corporation. 2. Stock Redemption Agreement: In this agreement, the corporation itself agrees to repurchase the shares of a departing or deceased shareholder. The corporation uses its own funds or borrows money to finance the purchase. 3. Hybrid Agreement: A combination of both the cross-purchase and stock redemption agreements, this type allows both the shareholders and the corporation to purchase shares. Key provisions found in a New Mexico Buy Sell Agreement include: 1. Purchase Price: The agreement should outline the method of determining the purchase price, which could be based on fair market value, book value, or a predetermined formula. 2. Triggering Events: The agreement must identify the specific events that will trigger the buyout, such as death, disability, retirement, voluntary sale, or bankruptcy. 3. Right of First Refusal: This provision grants the corporation or other shareholders the first opportunity to purchase the shares before they can be sold to an outside party. 4. Terms of Payment: The agreement needs to specify how the purchase price will be paid, whether in a lump sum, installments, or through financing arrangements. 5. Non-Compete and Confidentiality Clauses: These clauses may be included to prevent departing shareholders from competing with the corporation or disclosing sensitive information. 6. Dispute Resolution: The agreement should outline the process for resolving disputes, such as through mediation or arbitration. It is essential to consult with legal professionals specializing in corporate law when drafting or entering into a Buy Sell Agreement in New Mexico. They will ensure that the agreement is in accordance with state laws and tailored to the specific needs of the shareholders and the corporation.

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