Miami-Dade Florida Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation: A Buy-Sell Agreement is a legally binding contract between two shareholders of a closely held corporation, operating within the jurisdiction of Miami-Dade County in the state of Florida. This agreement outlines the terms and conditions under which shareholders can buy or sell their ownership interests in the corporation. It helps to facilitate a smooth transfer of shares and provides a mechanism to resolve potential disputes that may arise when a shareholder decides to leave the corporation. Types of Miami-Dade Florida Buy-Sell Agreements: 1. Cross-Purchase Agreement: In a cross-purchase agreement, the remaining shareholder(s) or the corporation itself agrees to purchase the shares of the departing shareholder. This type of agreement is often used in smaller corporations with a limited number of shareholders. 2. Redemption Agreement: In a redemption agreement, the corporation agrees to purchase the shares of the departing shareholder. The corporation becomes the buyer in this scenario, and the remaining shareholders' ownership percentages will increase proportionately. 3. Hybrid Agreement: A hybrid agreement, also known as a "wait-and-see" agreement, combines aspects of both cross-purchase and redemption agreements. This type allows the remaining shareholders and the corporation to decide who will purchase the shares upon the departure of a shareholder. Key Components of a Miami-Dade Florida Buy-Sell Agreement: 1. Purchase Price: The agreement should specify the method of determining the purchase price, whether it be based on a fixed amount, a formula, or a third-party appraisal. 2. Triggering Events: The agreement should define the circumstances that will activate the buy-sell provisions, such as retirement, death, disability, voluntary withdrawal, or dispute resolution. 3. Purchase Funding: The agreement should outline the funding mechanisms for purchasing the shares, which can include using personal funds, obtaining loans, or establishing a sinking fund. 4. Right of First Refusal: The agreement may grant the remaining shareholders or the corporation the first opportunity to purchase the departing shareholder's shares before selling to an outside party. 5. Restriction on Transfer: The agreement can contain provisions restricting the transfer of shares to non-shareholders, maintaining the closely held nature of the corporation. 6. Dispute Resolution: The agreement may include provisions for resolving disputes that may arise during the buy-sell process, such as mediation or arbitration. It is crucial for shareholders of a closely held corporation in Miami-Dade, Florida, to draft a comprehensive Buy-Sell Agreement that addresses their specific needs and ensures a smooth transition of ownership. Seeking legal counsel from a qualified attorney with expertise in corporate law is highly recommended ensuring compliance with local laws and regulations.
Miami-Dade Florida Buy-Sell Agreement between Two Shareholders of Closely Held Corporation
Category:
State:
Multi-State
County:
Miami-Dade
Control #:
US-02553BG
Format:
Word;
Rich Text
Instant download
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.
Miami-Dade Florida Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation: A Buy-Sell Agreement is a legally binding contract between two shareholders of a closely held corporation, operating within the jurisdiction of Miami-Dade County in the state of Florida. This agreement outlines the terms and conditions under which shareholders can buy or sell their ownership interests in the corporation. It helps to facilitate a smooth transfer of shares and provides a mechanism to resolve potential disputes that may arise when a shareholder decides to leave the corporation. Types of Miami-Dade Florida Buy-Sell Agreements: 1. Cross-Purchase Agreement: In a cross-purchase agreement, the remaining shareholder(s) or the corporation itself agrees to purchase the shares of the departing shareholder. This type of agreement is often used in smaller corporations with a limited number of shareholders. 2. Redemption Agreement: In a redemption agreement, the corporation agrees to purchase the shares of the departing shareholder. The corporation becomes the buyer in this scenario, and the remaining shareholders' ownership percentages will increase proportionately. 3. Hybrid Agreement: A hybrid agreement, also known as a "wait-and-see" agreement, combines aspects of both cross-purchase and redemption agreements. This type allows the remaining shareholders and the corporation to decide who will purchase the shares upon the departure of a shareholder. Key Components of a Miami-Dade Florida Buy-Sell Agreement: 1. Purchase Price: The agreement should specify the method of determining the purchase price, whether it be based on a fixed amount, a formula, or a third-party appraisal. 2. Triggering Events: The agreement should define the circumstances that will activate the buy-sell provisions, such as retirement, death, disability, voluntary withdrawal, or dispute resolution. 3. Purchase Funding: The agreement should outline the funding mechanisms for purchasing the shares, which can include using personal funds, obtaining loans, or establishing a sinking fund. 4. Right of First Refusal: The agreement may grant the remaining shareholders or the corporation the first opportunity to purchase the departing shareholder's shares before selling to an outside party. 5. Restriction on Transfer: The agreement can contain provisions restricting the transfer of shares to non-shareholders, maintaining the closely held nature of the corporation. 6. Dispute Resolution: The agreement may include provisions for resolving disputes that may arise during the buy-sell process, such as mediation or arbitration. It is crucial for shareholders of a closely held corporation in Miami-Dade, Florida, to draft a comprehensive Buy-Sell Agreement that addresses their specific needs and ensures a smooth transition of ownership. Seeking legal counsel from a qualified attorney with expertise in corporate law is highly recommended ensuring compliance with local laws and regulations.
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