Chicago Illinois Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• City: Chicago
• Control #: US-02569BG
• 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. This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction. Chicago Illinois is one of the largest and most populous cities in the United States, located in the Midwest region. It is known for its iconic skyline, diverse culture, and rich history. As the third-largest city in the country, Chicago is a major economic hub and home to numerous industries, including finance, technology, manufacturing, and healthcare. A Shareholders' Agreement is a legally binding contract between two shareholders of a closely held corporation. It outlines the rights, responsibilities, and obligations of the shareholders in relation to their shares in the company. In Chicago, Illinois, the Shareholders' Agreement may include provisions specifically tailored to the state's legal requirements. One type of Shareholders' Agreement commonly seen in Chicago Illinois is the Agreement with Buy-Sell Provisions. This specific provision provides a mechanism for shareholders to buy or sell their shares in certain predefined situations. These situations may include death, disability, retirement, bankruptcy, or a dispute between the shareholders. There are different variations of Shareholders' Agreements with Buy-Sell Provisions commonly used in Chicago Illinois. Some commonly named types include: 1. Cross-Purchase Agreement: In this agreement, the remaining shareholder(s) have the option to purchase the shares of the outgoing shareholder upon a triggering event. 2. Stock Redemption Agreement: This agreement allows the corporation itself to redeem the shares of the outgoing shareholder upon a triggering event. The corporation then typically cancels or holds those shares for future use. 3. Hybrid Agreement: A Hybrid Agreement incorporates elements of both Cross-Purchase and Stock Redemption agreements, providing flexibility for the shareholders to choose the most suitable method of buying or selling shares. The Buy-Sell Provisions generally involve setting a predetermined price or formula to determine the value of the shares during a triggering event. This ensures a fair and orderly transfer of shares, preventing any disputes or disagreements that could negatively impact the corporation and its remaining shareholders. It is important for shareholders of closely held corporations in Chicago Illinois to carefully consider and draft a Shareholders' Agreement with Buy-Sell Provisions that aligns with their specific needs and goals. Consulting with an experienced attorney specializing in corporate law can help ensure that the agreement adequately addresses the unique circumstances of the shareholders and complies with the relevant legal requirements in Chicago Illinois.

Chicago Illinois is one of the largest and most populous cities in the United States, located in the Midwest region. It is known for its iconic skyline, diverse culture, and rich history. As the third-largest city in the country, Chicago is a major economic hub and home to numerous industries, including finance, technology, manufacturing, and healthcare. A Shareholders' Agreement is a legally binding contract between two shareholders of a closely held corporation. It outlines the rights, responsibilities, and obligations of the shareholders in relation to their shares in the company. In Chicago, Illinois, the Shareholders' Agreement may include provisions specifically tailored to the state's legal requirements. One type of Shareholders' Agreement commonly seen in Chicago Illinois is the Agreement with Buy-Sell Provisions. This specific provision provides a mechanism for shareholders to buy or sell their shares in certain predefined situations. These situations may include death, disability, retirement, bankruptcy, or a dispute between the shareholders. There are different variations of Shareholders' Agreements with Buy-Sell Provisions commonly used in Chicago Illinois. Some commonly named types include: 1. Cross-Purchase Agreement: In this agreement, the remaining shareholder(s) have the option to purchase the shares of the outgoing shareholder upon a triggering event. 2. Stock Redemption Agreement: This agreement allows the corporation itself to redeem the shares of the outgoing shareholder upon a triggering event. The corporation then typically cancels or holds those shares for future use. 3. Hybrid Agreement: A Hybrid Agreement incorporates elements of both Cross-Purchase and Stock Redemption agreements, providing flexibility for the shareholders to choose the most suitable method of buying or selling shares. The Buy-Sell Provisions generally involve setting a predetermined price or formula to determine the value of the shares during a triggering event. This ensures a fair and orderly transfer of shares, preventing any disputes or disagreements that could negatively impact the corporation and its remaining shareholders. It is important for shareholders of closely held corporations in Chicago Illinois to carefully consider and draft a Shareholders' Agreement with Buy-Sell Provisions that aligns with their specific needs and goals. Consulting with an experienced attorney specializing in corporate law can help ensure that the agreement adequately addresses the unique circumstances of the shareholders and complies with the relevant legal requirements in Chicago Illinois.