Travis Texas Buy Sell Agreement Between Shareholders and a Corporation

• Category: Contracts - Buy Sell - Stock Purchases
• State: Multi-State
• County: Travis
• 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 Travis Texas Buy Sell Agreement Between Shareholders and a Corporation is a legally binding contract that outlines the terms and conditions for the buying and selling of shares between the existing shareholders and the corporation itself. This agreement helps streamline the transfer of ownership and protects the interests of all parties involved. The purpose of a Travis Texas Buy Sell Agreement is to establish a set of rules and procedures that govern the sale and purchase of shares within a corporation. It provides a clear framework for shareholders who wish to exit the company through the sale of their shares, as well as for the corporation in case it wants to repurchase or sell shares to other parties. There are different types of Travis Texas Buy Sell Agreements that can be used depending on the specific needs and goals of the shareholders and the corporation: 1. Cross-Purchase Agreement: In a cross-purchase agreement, the remaining shareholders have the right and obligation to buy the shares of a departing shareholder. Each shareholder typically purchases a proportionate number of shares based on their existing ownership percentage. 2. Stock Redemption Agreement: In a stock redemption agreement, the corporation itself has the right and obligation to redeem the shares of a departing shareholder. The corporation uses its funds or borrows money to repurchase the shares from the shareholder. After the redemption, the shares are usually canceled and no longer exist. 3. Hybrid Agreement: A hybrid agreement combines elements of both cross-purchase and stock redemption agreements. It provides flexibility by allowing either the shareholders or the corporation to buy back shares. Key provisions included in a Travis Texas Buy Sell Agreement generally cover the following aspects: — Purchase price and valuation: The agreement outlines the method for determining the purchase price of the shares, ensuring a fair evaluation is conducted to avoid disputes. — Triggers for a buy-sell event: The agreement specifies events that can trigger a buy-sell, such as death, disability, retirement, voluntary resignation, or involuntary termination of a shareholder. — Right of first refusal: The agreement may provide existing shareholders with the right to purchase shares before they are offered to external parties, ensuring continued ownership control. — Restrictions on transfers: The agreement may include restrictions on transferring shares to non-shareholders or require board approval for such transfers. — Funding mechanisms: The agreement addresses how the purchase price will be funded, whether through cash, installment payments, or using insurance policies, particularly in the case of death-triggered events. — Dispute resolution: The agreement establishes a process for resolving disputes, such as mediation or arbitration, to avoid costly litigation. In summary, a Travis Texas Buy Sell Agreement Between Shareholders and a Corporation establishes the procedures and safeguards necessary for the orderly buying and selling of shares within a corporation. By clarifying the rights, obligations, and mechanisms of ownership transfer, this agreement ensures a smooth transition while protecting the interests of both shareholders and the corporation.

A Travis Texas Buy Sell Agreement Between Shareholders and a Corporation is a legally binding contract that outlines the terms and conditions for the buying and selling of shares between the existing shareholders and the corporation itself. This agreement helps streamline the transfer of ownership and protects the interests of all parties involved. The purpose of a Travis Texas Buy Sell Agreement is to establish a set of rules and procedures that govern the sale and purchase of shares within a corporation. It provides a clear framework for shareholders who wish to exit the company through the sale of their shares, as well as for the corporation in case it wants to repurchase or sell shares to other parties. There are different types of Travis Texas Buy Sell Agreements that can be used depending on the specific needs and goals of the shareholders and the corporation: 1. Cross-Purchase Agreement: In a cross-purchase agreement, the remaining shareholders have the right and obligation to buy the shares of a departing shareholder. Each shareholder typically purchases a proportionate number of shares based on their existing ownership percentage. 2. Stock Redemption Agreement: In a stock redemption agreement, the corporation itself has the right and obligation to redeem the shares of a departing shareholder. The corporation uses its funds or borrows money to repurchase the shares from the shareholder. After the redemption, the shares are usually canceled and no longer exist. 3. Hybrid Agreement: A hybrid agreement combines elements of both cross-purchase and stock redemption agreements. It provides flexibility by allowing either the shareholders or the corporation to buy back shares. Key provisions included in a Travis Texas Buy Sell Agreement generally cover the following aspects: — Purchase price and valuation: The agreement outlines the method for determining the purchase price of the shares, ensuring a fair evaluation is conducted to avoid disputes. — Triggers for a buy-sell event: The agreement specifies events that can trigger a buy-sell, such as death, disability, retirement, voluntary resignation, or involuntary termination of a shareholder. — Right of first refusal: The agreement may provide existing shareholders with the right to purchase shares before they are offered to external parties, ensuring continued ownership control. — Restrictions on transfers: The agreement may include restrictions on transferring shares to non-shareholders or require board approval for such transfers. — Funding mechanisms: The agreement addresses how the purchase price will be funded, whether through cash, installment payments, or using insurance policies, particularly in the case of death-triggered events. — Dispute resolution: The agreement establishes a process for resolving disputes, such as mediation or arbitration, to avoid costly litigation. In summary, a Travis Texas Buy Sell Agreement Between Shareholders and a Corporation establishes the procedures and safeguards necessary for the orderly buying and selling of shares within a corporation. By clarifying the rights, obligations, and mechanisms of ownership transfer, this agreement ensures a smooth transition while protecting the interests of both shareholders and the corporation.

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