Collin Texas Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• County: Collin
• 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. In Collin, Texas, a Shareholders' Agreement between Two Shareholders of a Closely Held Corporation is a crucial legal document that outlines the rights, responsibilities, and obligations of the shareholders involved. This agreement plays a vital role in protecting the interests of both parties and establishing a clear framework for decision-making, ownership transfers, and conflict resolution within the corporation. The Shareholders' Agreement typically includes provisions related to buy-sell agreements, which are designed to address the potential transfer of shares in various scenarios such as death, disability, retirement, or voluntary sale. These provisions offer a framework for the orderly transfer of shares and ensure the continuity of the corporation's operations. Key terms and concepts related to Collin, Texas Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy-Sell Provisions may include: 1. Buy-Sell Agreement: A legally binding agreement that governs the purchase and sale of shares between shareholders under specific circumstances. 2. Buy-Sell Provisions: Clauses within the Shareholders' Agreement that outline the conditions triggering a buy-sell transaction, such as death, disability, retirement, or voluntary sale. 3. Redemption Option: An agreement clause that allows one shareholder to buy out the other shareholder's shares in the event of certain triggering events. 4. Right of First Refusal: A provision granting existing shareholders the first opportunity to purchase any shares offered for sale by a shareholder who intends to sell their shares. 5. Fair Market Value: The price at which the shares will be valued for the purpose of a buy-sell transaction, often determined by an independent appraiser. Different types of Collin, Texas Shareholders' Agreement with Buy-Sell Provisions may include: 1. Cross-Purchase Agreement: In this type of agreement, each shareholder has the right and obligation to purchase the other shareholder's shares in the event of a triggering event. 2. Stock Redemption Agreement: In this arrangement, the corporation itself, rather than the individual shareholders, agrees to redeem the shares of the departing shareholder. 3. Hybrid Agreement: A combination of both cross-purchase and stock redemption agreements, allowing shareholders to choose how they wish to handle share transfers in specific circumstances. 4. One-Way Agreement: This type of agreement only provides for one shareholder's right to buy out the other shareholder's shares, while the latter shareholder does not have the reciprocal right. It's important to consult with an experienced business attorney in Collin, Texas to tailor the Shareholders' Agreement to the specific needs and requirements of the closely held corporation and its shareholders. They can provide guidance on choosing the most appropriate type of agreement and drafting provisions that align with the shareholders' goals and intentions.

In Collin, Texas, a Shareholders' Agreement between Two Shareholders of a Closely Held Corporation is a crucial legal document that outlines the rights, responsibilities, and obligations of the shareholders involved. This agreement plays a vital role in protecting the interests of both parties and establishing a clear framework for decision-making, ownership transfers, and conflict resolution within the corporation. The Shareholders' Agreement typically includes provisions related to buy-sell agreements, which are designed to address the potential transfer of shares in various scenarios such as death, disability, retirement, or voluntary sale. These provisions offer a framework for the orderly transfer of shares and ensure the continuity of the corporation's operations. Key terms and concepts related to Collin, Texas Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy-Sell Provisions may include: 1. Buy-Sell Agreement: A legally binding agreement that governs the purchase and sale of shares between shareholders under specific circumstances. 2. Buy-Sell Provisions: Clauses within the Shareholders' Agreement that outline the conditions triggering a buy-sell transaction, such as death, disability, retirement, or voluntary sale. 3. Redemption Option: An agreement clause that allows one shareholder to buy out the other shareholder's shares in the event of certain triggering events. 4. Right of First Refusal: A provision granting existing shareholders the first opportunity to purchase any shares offered for sale by a shareholder who intends to sell their shares. 5. Fair Market Value: The price at which the shares will be valued for the purpose of a buy-sell transaction, often determined by an independent appraiser. Different types of Collin, Texas Shareholders' Agreement with Buy-Sell Provisions may include: 1. Cross-Purchase Agreement: In this type of agreement, each shareholder has the right and obligation to purchase the other shareholder's shares in the event of a triggering event. 2. Stock Redemption Agreement: In this arrangement, the corporation itself, rather than the individual shareholders, agrees to redeem the shares of the departing shareholder. 3. Hybrid Agreement: A combination of both cross-purchase and stock redemption agreements, allowing shareholders to choose how they wish to handle share transfers in specific circumstances. 4. One-Way Agreement: This type of agreement only provides for one shareholder's right to buy out the other shareholder's shares, while the latter shareholder does not have the reciprocal right. It's important to consult with an experienced business attorney in Collin, Texas to tailor the Shareholders' Agreement to the specific needs and requirements of the closely held corporation and its shareholders. They can provide guidance on choosing the most appropriate type of agreement and drafting provisions that align with the shareholders' goals and intentions.