New York Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder should the Beneficiaries of the Deceased Shareholder Desire to Sell such Shares

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• Control #: US-02629BG
• Format: Word; Rich Text

Description

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 York Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder should the Beneficiaries of the Deceased Shareholder Desire to Sell such Shares is a legally binding agreement that outlines the rights and obligations of shareholders in a New York corporation in the event of a shareholder's death. This agreement specifically grants the corporation the first opportunity to purchase the shares of a deceased shareholder before they can be sold to any third party. Keywords: New York Shareholders' Agreement, Buy-Sell Agreement, First Right of Refusal, Purchase Shares, Deceased Shareholder, Beneficiaries, Sell Shares. There are different types of Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder, which may include: 1. Voluntary Buy-Sell Agreement: This type of agreement is entered into willingly by the shareholders of a corporation, where they collectively decide to provide the corporation with the first right to purchase shares in the event of a shareholder's death. 2. Compulsory Buy-Sell Agreement: In this type of agreement, the first right of refusal is mandated by New York state law or the corporation's governing documents. Shareholders are obligated to include the provision that grants the corporation the opportunity to purchase shares upon a shareholder's death. 3. Cross-Purchase Agreement: In a cross-purchase agreement, the remaining shareholders of the corporation have the right to buy the shares of a deceased shareholder. The corporation itself is not involved in this process, and the purchasing shareholders buy the shares in proportion to their existing ownership. 4. Redemption Agreement: Unlike a cross-purchase agreement, a redemption agreement allows the corporation itself to buy the shares of a deceased shareholder. The corporation becomes the purchaser and owns the redeemed shares. 5. Hybrid Agreement: A hybrid agreement combines elements of both the cross-purchase and redemption agreements. It allows the remaining shareholders and the corporation to have the option to purchase the shares, providing more flexibility depending on the circumstances. In conclusion, a New York Shareholders' Agreement with a Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder is an essential document for shareholders of a New York corporation. It ensures that the corporation has the opportunity to buy back shares in the event of a shareholder's death, providing stability, control, and protection for both the corporation and its shareholders.