San Antonio Texas Buy-Sell Agreement between Two Shareholders of Closely Held Corporation

• Category: Corporations - Contracts
• State: Multi-State
• City: San Antonio
• 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. A San Antonio Texas Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation is a legally binding contract that outlines the terms and conditions for the sale and purchase of shares within a closely held corporation located in San Antonio, Texas. This agreement serves to establish a clear and structured process for the transfer of shares between the two shareholders, ensuring smooth transitions and the protection of each party's interests. Key elements included in a San Antonio Texas Buy-Sell Agreement typically encompass: 1. Agreement Overview: The agreement should begin with a clear identification of the parties involved, their share ownership, and the corporation's details. This section specifies that the agreement applies to a closely held corporation based in San Antonio, Texas. 2. Purchase and Sale Provisions: This segment outlines how shares will be valued and sold, including the methods used for determining the fair market value or the predetermined price. It may include provisions for appraisals, independent valuation, or the use of formula pricing. 3. Triggering Events: These events initiate the buy-sell process and may include retirement, death, disability, divorce, bankruptcy, or voluntary withdrawal from the corporation. This section serves to establish when the agreement is triggered, and the required actions to be taken in such circumstances. 4. Restrictions on Transfer: This part establishes restrictions on transferring shares to third parties and emphasizes the obligation to offer the shares first to the other shareholder(s) before any external transfer can occur. It sets forth the right of first refusal and preemption rights. 5. Funding Mechanisms: This clause addresses the financial aspects of the buy-sell agreement, explaining the funding methods that shareholders may utilize, such as cash, installment payments, borrowing, life insurance proceeds, or shares. 6. Dispute Resolution: Including provisions for dispute resolution can help avoid potential conflicts. Mediation and arbitration are commonly used methods in San Antonio, Texas, to resolve any disagreements arising during the buy-sell process. 7. Termination: This section details the events and conditions under which the agreement can be terminated, such as unanimous consent of the shareholders or the corporation's dissolution. Different types of San Antonio Texas Buy-Sell Agreements between Two Shareholders of Closely Held Corporations include: 1. Cross-Purchase Agreement: Each shareholder agrees to buy the other shareholder's shares upon the occurrence of a triggering event. This type of agreement is suitable when there are only a few shareholders. 2. Stock Redemption Agreement: The corporation is obligated to redeem the shares upon the occurrence of a triggering event. The corporation buys back the shares and distributes them among the remaining shareholders or cancels them. 3. Hybrid Agreement: This type combines elements of both the cross-purchase and stock redemption agreements. Different triggering events may involve either the shareholders or the corporation in the purchase and sale process. In conclusion, a San Antonio Texas Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation sets out the rules and procedures for the buying and selling of shares, ensuring a smooth transition and maintaining the stability of the corporation. Different types of buy-sell agreements may be utilized based on the specific needs and preferences of the shareholders involved.

A San Antonio Texas Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation is a legally binding contract that outlines the terms and conditions for the sale and purchase of shares within a closely held corporation located in San Antonio, Texas. This agreement serves to establish a clear and structured process for the transfer of shares between the two shareholders, ensuring smooth transitions and the protection of each party's interests. Key elements included in a San Antonio Texas Buy-Sell Agreement typically encompass: 1. Agreement Overview: The agreement should begin with a clear identification of the parties involved, their share ownership, and the corporation's details. This section specifies that the agreement applies to a closely held corporation based in San Antonio, Texas. 2. Purchase and Sale Provisions: This segment outlines how shares will be valued and sold, including the methods used for determining the fair market value or the predetermined price. It may include provisions for appraisals, independent valuation, or the use of formula pricing. 3. Triggering Events: These events initiate the buy-sell process and may include retirement, death, disability, divorce, bankruptcy, or voluntary withdrawal from the corporation. This section serves to establish when the agreement is triggered, and the required actions to be taken in such circumstances. 4. Restrictions on Transfer: This part establishes restrictions on transferring shares to third parties and emphasizes the obligation to offer the shares first to the other shareholder(s) before any external transfer can occur. It sets forth the right of first refusal and preemption rights. 5. Funding Mechanisms: This clause addresses the financial aspects of the buy-sell agreement, explaining the funding methods that shareholders may utilize, such as cash, installment payments, borrowing, life insurance proceeds, or shares. 6. Dispute Resolution: Including provisions for dispute resolution can help avoid potential conflicts. Mediation and arbitration are commonly used methods in San Antonio, Texas, to resolve any disagreements arising during the buy-sell process. 7. Termination: This section details the events and conditions under which the agreement can be terminated, such as unanimous consent of the shareholders or the corporation's dissolution. Different types of San Antonio Texas Buy-Sell Agreements between Two Shareholders of Closely Held Corporations include: 1. Cross-Purchase Agreement: Each shareholder agrees to buy the other shareholder's shares upon the occurrence of a triggering event. This type of agreement is suitable when there are only a few shareholders. 2. Stock Redemption Agreement: The corporation is obligated to redeem the shares upon the occurrence of a triggering event. The corporation buys back the shares and distributes them among the remaining shareholders or cancels them. 3. Hybrid Agreement: This type combines elements of both the cross-purchase and stock redemption agreements. Different triggering events may involve either the shareholders or the corporation in the purchase and sale process. In conclusion, a San Antonio Texas Buy-Sell Agreement between Two Shareholders of a Closely Held Corporation sets out the rules and procedures for the buying and selling of shares, ensuring a smooth transition and maintaining the stability of the corporation. Different types of buy-sell agreements may be utilized based on the specific needs and preferences of the shareholders involved.