Sacramento California Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance

• Category: Contracts - Buy Sell - Stock Purchases
• State: Multi-State
• County: Sacramento
• Control #: US-00455BG
• Format: Word; Rich Text

Description

This form is set up as a Buy Sell Agreement between the Corporation and a key shareholder. It applies in the case of the death, disability, retirement or offer of shareholder to sell the stock during his lifetime. Sacramento California Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance A Sacramento California Buy Sell or Stock Purchase Agreement covering common stock in a closely held corporation with the option to fund the purchase through life insurance is a legally binding agreement that outlines the terms and conditions for the purchase or transfer of common stock in a closely held corporation located in Sacramento, California. This type of agreement is particularly beneficial for shareholders in closely held corporations, as it provides a mechanism to ensure a smooth transfer of ownership in the event of certain triggering events, such as the death or disability of a shareholder. Keywords: Sacramento California, Buy Sell Agreement, Stock Purchase Agreement, Common Stock, Closely Held Corporation, Life Insurance, Funding Option, Triggering Events. Types of Sacramento California Buy Sell or Stock Purchase Agreements Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance: 1. Cross-Purchase Agreement: In this type of agreement, shareholders within the closely held corporation agree to purchase the shares of a deceased or disabled shareholder from their estate or trust. The life insurance policy is taken out by each shareholder on the life of the others. Upon the occurrence of a triggering event, the life insurance proceeds are used to fund the purchase of the deceased or disabled shareholder's stock. 2. Entity Purchase Agreement: This type of agreement involves the closely held corporation itself purchasing the shares from the estate or trust of a deceased or disabled shareholder. The corporation takes out a life insurance policy on the lives of the shareholders, and upon a triggering event, the corporation uses the life insurance proceeds to buy back the shares. 3. Wait-and-See Agreement: In this type of agreement, the decision between a cross-purchase and entity purchase is deferred until a triggering event occurs. The closely held corporation, its shareholders, and the insurer enter into an agreement stipulating that the corporation has the first right to purchase the shares, but if the corporation cannot or chooses not to purchase the shares, the remaining shareholders have the option to buy the shares. 4. Hybrid Agreement: This agreement combines elements from both the cross-purchase and entity purchase agreements. It allows certain shareholders to purchase the shares of a deceased or disabled shareholder while the corporation has the option to purchase any remaining shares. Each type of agreement can be tailored to the specific needs and preferences of the shareholders and the closely held corporation. The use of life insurance as a funding option provides financial security and liquidity to facilitate the purchase of the common stock, ensuring the continuity and stability of the corporation in the face of unexpected events.

Sacramento California Buy Sell or Stock Purchase Agreement Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance A Sacramento California Buy Sell or Stock Purchase Agreement covering common stock in a closely held corporation with the option to fund the purchase through life insurance is a legally binding agreement that outlines the terms and conditions for the purchase or transfer of common stock in a closely held corporation located in Sacramento, California. This type of agreement is particularly beneficial for shareholders in closely held corporations, as it provides a mechanism to ensure a smooth transfer of ownership in the event of certain triggering events, such as the death or disability of a shareholder. Keywords: Sacramento California, Buy Sell Agreement, Stock Purchase Agreement, Common Stock, Closely Held Corporation, Life Insurance, Funding Option, Triggering Events. Types of Sacramento California Buy Sell or Stock Purchase Agreements Covering Common Stock in Closely Held Corporation with Option to Fund Purchase through Life Insurance: 1. Cross-Purchase Agreement: In this type of agreement, shareholders within the closely held corporation agree to purchase the shares of a deceased or disabled shareholder from their estate or trust. The life insurance policy is taken out by each shareholder on the life of the others. Upon the occurrence of a triggering event, the life insurance proceeds are used to fund the purchase of the deceased or disabled shareholder's stock. 2. Entity Purchase Agreement: This type of agreement involves the closely held corporation itself purchasing the shares from the estate or trust of a deceased or disabled shareholder. The corporation takes out a life insurance policy on the lives of the shareholders, and upon a triggering event, the corporation uses the life insurance proceeds to buy back the shares. 3. Wait-and-See Agreement: In this type of agreement, the decision between a cross-purchase and entity purchase is deferred until a triggering event occurs. The closely held corporation, its shareholders, and the insurer enter into an agreement stipulating that the corporation has the first right to purchase the shares, but if the corporation cannot or chooses not to purchase the shares, the remaining shareholders have the option to buy the shares. 4. Hybrid Agreement: This agreement combines elements from both the cross-purchase and entity purchase agreements. It allows certain shareholders to purchase the shares of a deceased or disabled shareholder while the corporation has the option to purchase any remaining shares. Each type of agreement can be tailored to the specific needs and preferences of the shareholders and the closely held corporation. The use of life insurance as a funding option provides financial security and liquidity to facilitate the purchase of the common stock, ensuring the continuity and stability of the corporation in the face of unexpected events.