Utah Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• Control #: US-02569BG
• 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 Utah Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a legal document that establishes the rights, obligations, and expectations of shareholders in a closely held corporation. This agreement is specifically tailored to meet the requirements set by Utah state law and provides mechanisms for the transfer and sale of shares between the two shareholders. Keywords: Utah Shareholders' Agreement, Two Shareholders, Closely Held Corporation, Buy Sell Provisions, legal document, rights, obligations, expectations, transfer, sale, mechanisms, Utah state law. There are several types of Utah Shareholders' Agreements between Two Shareholders of Closely Held Corporations with Buy Sell Provisions, including: 1. Traditional Buy-Sell Agreement: This type of agreement outlines the terms and conditions for the purchase and sale of shares between the two shareholders. It typically includes provisions such as triggering events (death, disability, retirement, etc.), valuation methods, and funding mechanisms (such as life insurance policies or installment payments). 2. Right of First Refusal Agreement: In this type of agreement, one shareholder has the right to purchase the other shareholder's shares before they can be sold to a third party. This ensures that existing shareholders have the opportunity to maintain control of the corporation and prevents unwanted outsiders from becoming shareholders. 3. Drag-Along and Tag-Along Clause Agreement: These provisions are commonly included in a Shareholders' Agreement to protect the rights of minority shareholders. The drag-along clause allows majority shareholders to force minority shareholders to sell their shares in the event of a sale or merger of the corporation. On the other hand, the tag-along clause permits minority shareholders to "tag along" and sell their shares on the same terms as the majority shareholders when a sale or merger occurs. 4. Redemption Agreement: A redemption agreement provides a mechanism for the corporation to buy back the shares of a shareholder, typically upon certain specified events or at a specified price. This type of agreement is often used in situations where a shareholder wants to exit the company, but there are no third-party buyers or where there is a need to maintain control over the ownership structure. 5. Cross-purchase Agreement: A cross-purchase agreement allows each shareholder to purchase the shares of the other shareholder in the event of a triggering event. This type of agreement is commonly used when there are only two shareholders and provides a simple and direct approach to facilitate the transfer of shares. In conclusion, a Utah Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a critical legal document that ensures a smooth and organized process for the transfer and sale of shares between shareholders. Different types of agreements can be tailored to suit the specific needs and circumstances of the shareholders involved.

A Utah Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a legal document that establishes the rights, obligations, and expectations of shareholders in a closely held corporation. This agreement is specifically tailored to meet the requirements set by Utah state law and provides mechanisms for the transfer and sale of shares between the two shareholders. Keywords: Utah Shareholders' Agreement, Two Shareholders, Closely Held Corporation, Buy Sell Provisions, legal document, rights, obligations, expectations, transfer, sale, mechanisms, Utah state law. There are several types of Utah Shareholders' Agreements between Two Shareholders of Closely Held Corporations with Buy Sell Provisions, including: 1. Traditional Buy-Sell Agreement: This type of agreement outlines the terms and conditions for the purchase and sale of shares between the two shareholders. It typically includes provisions such as triggering events (death, disability, retirement, etc.), valuation methods, and funding mechanisms (such as life insurance policies or installment payments). 2. Right of First Refusal Agreement: In this type of agreement, one shareholder has the right to purchase the other shareholder's shares before they can be sold to a third party. This ensures that existing shareholders have the opportunity to maintain control of the corporation and prevents unwanted outsiders from becoming shareholders. 3. Drag-Along and Tag-Along Clause Agreement: These provisions are commonly included in a Shareholders' Agreement to protect the rights of minority shareholders. The drag-along clause allows majority shareholders to force minority shareholders to sell their shares in the event of a sale or merger of the corporation. On the other hand, the tag-along clause permits minority shareholders to "tag along" and sell their shares on the same terms as the majority shareholders when a sale or merger occurs. 4. Redemption Agreement: A redemption agreement provides a mechanism for the corporation to buy back the shares of a shareholder, typically upon certain specified events or at a specified price. This type of agreement is often used in situations where a shareholder wants to exit the company, but there are no third-party buyers or where there is a need to maintain control over the ownership structure. 5. Cross-purchase Agreement: A cross-purchase agreement allows each shareholder to purchase the shares of the other shareholder in the event of a triggering event. This type of agreement is commonly used when there are only two shareholders and provides a simple and direct approach to facilitate the transfer of shares. In conclusion, a Utah Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a critical legal document that ensures a smooth and organized process for the transfer and sale of shares between shareholders. Different types of agreements can be tailored to suit the specific needs and circumstances of the shareholders involved.