Allegheny Pennsylvania Buy-Sell Agreement between Two Shareholders of Closely Held Corporation

• Category: Corporations - Contracts
• State: Multi-State
• County: Allegheny
• Control #: US-02553BG
• 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. Allegheny Pennsylvania Buy-Sell Agreement is a legally binding contract between two shareholders of a closely held corporation located in Allegheny, Pennsylvania. This agreement outlines the terms and conditions for the sale and purchase of shares in the corporation. It is designed to provide protection and ensure a smooth transition in the event of a shareholder's death, disability, retirement, or desire to sell their shares. The Allegheny Pennsylvania Buy-Sell Agreement typically covers various aspects such as the purchase price, valuation methods, funding mechanisms, and the triggering events that would activate the agreement. Some common types of Buy-Sell Agreements utilized in Allegheny, Pennsylvania include: 1. Cross-Purchase Agreement: In this scenario, each shareholder agrees to purchase the shares of the other shareholder in the event of a triggering event. The price is predetermined and can be based on a formula or independent appraisal. 2. Stock Redemption Agreement: Under this agreement, the corporation agrees to redeem the shares of the departing shareholder. The corporation typically acquires life insurance policies to fund this type of agreement. 3. Hybrid Agreement: A combination of both cross-purchase and stock redemption agreements, a hybrid agreement allows both shareholders and the corporation to participate in the purchase of shares. Keywords: Allegheny Pennsylvania, Buy-Sell Agreement, closely held corporation, shareholders, terms and conditions, purchase price, valuation methods, funding mechanisms, triggering events, cross-purchase agreement, stock redemption agreement, hybrid agreement, smooth transition, protection.

Allegheny Pennsylvania Buy-Sell Agreement is a legally binding contract between two shareholders of a closely held corporation located in Allegheny, Pennsylvania. This agreement outlines the terms and conditions for the sale and purchase of shares in the corporation. It is designed to provide protection and ensure a smooth transition in the event of a shareholder's death, disability, retirement, or desire to sell their shares. The Allegheny Pennsylvania Buy-Sell Agreement typically covers various aspects such as the purchase price, valuation methods, funding mechanisms, and the triggering events that would activate the agreement. Some common types of Buy-Sell Agreements utilized in Allegheny, Pennsylvania include: 1. Cross-Purchase Agreement: In this scenario, each shareholder agrees to purchase the shares of the other shareholder in the event of a triggering event. The price is predetermined and can be based on a formula or independent appraisal. 2. Stock Redemption Agreement: Under this agreement, the corporation agrees to redeem the shares of the departing shareholder. The corporation typically acquires life insurance policies to fund this type of agreement. 3. Hybrid Agreement: A combination of both cross-purchase and stock redemption agreements, a hybrid agreement allows both shareholders and the corporation to participate in the purchase of shares. Keywords: Allegheny Pennsylvania, Buy-Sell Agreement, closely held corporation, shareholders, terms and conditions, purchase price, valuation methods, funding mechanisms, triggering events, cross-purchase agreement, stock redemption agreement, hybrid agreement, smooth transition, protection.