Wisconsin Buy-Sell Agreement between Shareholders of Closely Held Corporation

• Category: Corporations - Buy Sell
• State: Multi-State
• Control #: US-02462BG
• Format: Word; PDF; 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. A Wisconsin Buy-Sell Agreement between Shareholders of a Closely Held Corporation is a legally binding contract that outlines the terms and conditions for shareholders within a closely held corporation to buy or sell their shares in certain circumstances. This agreement serves as a safeguard to protect the interests and rights of each shareholder and to ensure the smooth functioning and continuity of the corporation. Some relevant keywords to understand the Wisconsin Buy-Sell Agreement between Shareholders of a Closely Held Corporation include: 1. Buy-Sell Agreement: A legally enforceable agreement that governs the transfer of shares between shareholders in a closely held corporation. 2. Shareholders: Individuals or entities who own shares in a closely held corporation and have a stake in its ownership and profits. 3. Closely Held Corporation: A corporation in which the majority of shares are held by a limited number of shareholders, typically family members or a small group of individuals. 4. Transfer of Shares: The process of transferring ownership of shares from one shareholder to another, as outlined in the agreement. 5. Valuation: The determination of the fair market value of shares, which is crucial for determining the buyout price in a buy-sell agreement. 6. Triggering Events: Specific events outlined in the agreement that trigger the buy-sell process, such as the death, disability, retirement, or voluntary sale of a shareholder's shares. 7. Right of First Refusal: A provision in the agreement that grants existing shareholders the first opportunity to purchase shares being sold by a shareholder. 8. Cross-Purchase Agreement: A type of buy-sell agreement where each shareholder agrees to buy the shares of a departing shareholder pro rata based on their respective ownership percentages. 9. Redemption Agreement: A type of buy-sell agreement where the corporation itself agrees to redeem the shares of a departing shareholder upon the occurrence of a triggering event. 10. Hybrid Agreement: A buy-sell agreement that combines elements of both the cross-purchase and redemption agreements, allowing shareholders to choose between buying the departing shareholder's shares or having the corporation redeem them. In Wisconsin, there are no specific statutory requirements for a buy-sell agreement, but it is recommended to draft a comprehensive agreement that addresses various potential scenarios and includes the necessary provisions to protect shareholders' interests. Different types of agreements may be used based on the specific needs and preferences of the shareholders, including cross-purchase agreements, redemption agreements, or hybrid agreements. It is crucial for shareholders to consult with a qualified attorney to draft a buy-sell agreement tailored to their particular circumstances and comply with Wisconsin corporate law.

A Wisconsin Buy-Sell Agreement between Shareholders of a Closely Held Corporation is a legally binding contract that outlines the terms and conditions for shareholders within a closely held corporation to buy or sell their shares in certain circumstances. This agreement serves as a safeguard to protect the interests and rights of each shareholder and to ensure the smooth functioning and continuity of the corporation. Some relevant keywords to understand the Wisconsin Buy-Sell Agreement between Shareholders of a Closely Held Corporation include: 1. Buy-Sell Agreement: A legally enforceable agreement that governs the transfer of shares between shareholders in a closely held corporation. 2. Shareholders: Individuals or entities who own shares in a closely held corporation and have a stake in its ownership and profits. 3. Closely Held Corporation: A corporation in which the majority of shares are held by a limited number of shareholders, typically family members or a small group of individuals. 4. Transfer of Shares: The process of transferring ownership of shares from one shareholder to another, as outlined in the agreement. 5. Valuation: The determination of the fair market value of shares, which is crucial for determining the buyout price in a buy-sell agreement. 6. Triggering Events: Specific events outlined in the agreement that trigger the buy-sell process, such as the death, disability, retirement, or voluntary sale of a shareholder's shares. 7. Right of First Refusal: A provision in the agreement that grants existing shareholders the first opportunity to purchase shares being sold by a shareholder. 8. Cross-Purchase Agreement: A type of buy-sell agreement where each shareholder agrees to buy the shares of a departing shareholder pro rata based on their respective ownership percentages. 9. Redemption Agreement: A type of buy-sell agreement where the corporation itself agrees to redeem the shares of a departing shareholder upon the occurrence of a triggering event. 10. Hybrid Agreement: A buy-sell agreement that combines elements of both the cross-purchase and redemption agreements, allowing shareholders to choose between buying the departing shareholder's shares or having the corporation redeem them. In Wisconsin, there are no specific statutory requirements for a buy-sell agreement, but it is recommended to draft a comprehensive agreement that addresses various potential scenarios and includes the necessary provisions to protect shareholders' interests. Different types of agreements may be used based on the specific needs and preferences of the shareholders, including cross-purchase agreements, redemption agreements, or hybrid agreements. It is crucial for shareholders to consult with a qualified attorney to draft a buy-sell agreement tailored to their particular circumstances and comply with Wisconsin corporate law.