Oakland Michigan Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• County: Oakland
• 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. Oakland Michigan Shareholders' Agreement is a legally binding contract between two shareholders of a closely held corporation that includes buy-sell provisions. This agreement outlines the rights, responsibilities, and obligations of the shareholders in relation to their shares in the company. It is designed to protect the interests of both shareholders and ensure a fair and orderly transfer of shares in certain situations. The agreement typically includes provisions related to the following: 1. Definitions: Clearly defining terms used throughout the agreement, such as "corporation," "shareholder," "shares," etc. 2. Ownership and Transfer of Shares: Outlining the percentage of shares owned by each shareholder and any restrictions on their transfer or sale. This can include a right of first refusal, which gives existing shareholders the opportunity to purchase shares before they are offered to third parties. 3. Buy-Sell Provisions: Detailing the circumstances under which a shareholder may be required to sell their shares. This can include events such as the death, disability, retirement, bankruptcy, or divorce of a shareholder. The provisions also specify how the purchase price will be determined, whether through a predetermined formula or a valuation process. 4. Purchase and Sale of Shares: Describing the process and procedures for buying and selling shares, including the timeline, payment terms, and any necessary approvals or consents. 5. Rights and Responsibilities of Shareholders: Enumerating the rights and obligations of each shareholder, such as voting rights, access to financial information, participation in management decisions, and non-competition agreements. 6. Dispute Resolution: Outlining a mechanism for resolving disputes between the shareholders, such as mediation or arbitration. This helps to prevent costly and time-consuming litigation. 7. Termination and Dissolution: Addressing the circumstances under which the agreement may be terminated, such as the transfer of all shares to a third party or the liquidation of the corporation. Different types of Oakland Michigan Shareholders' Agreement with buy-sell provisions can be classified based on the specific situations they address. Some potential variations include: — Oakland Michigan Shareholders' Agreement with Death Buyout Provision: Focuses on the transfer of shares in the event of a shareholder's death. — Oakland Michigan Shareholders' Agreement with Disability Buyout Provision: Specifies the process for selling shares if a shareholder becomes permanently disabled. — Oakland Michigan Shareholders' Agreement with Retirement Buyout Provision: Addresses the sale of shares when a shareholder wishes to retire from the company. — Oakland Michigan Shareholders' Agreement with Mandatory Buyout Provision: Requires a shareholder to sell their shares under specific circumstances, such as bankruptcy or breach of fiduciary duty. These are just a few examples of the types of Oakland Michigan Shareholders' Agreement that can be tailored to meet the unique needs of closely held corporations and their shareholders. It is important for shareholders to consult with an attorney experienced in corporate law to create a comprehensive agreement that best suits their specific circumstances.

Oakland Michigan Shareholders' Agreement is a legally binding contract between two shareholders of a closely held corporation that includes buy-sell provisions. This agreement outlines the rights, responsibilities, and obligations of the shareholders in relation to their shares in the company. It is designed to protect the interests of both shareholders and ensure a fair and orderly transfer of shares in certain situations. The agreement typically includes provisions related to the following: 1. Definitions: Clearly defining terms used throughout the agreement, such as "corporation," "shareholder," "shares," etc. 2. Ownership and Transfer of Shares: Outlining the percentage of shares owned by each shareholder and any restrictions on their transfer or sale. This can include a right of first refusal, which gives existing shareholders the opportunity to purchase shares before they are offered to third parties. 3. Buy-Sell Provisions: Detailing the circumstances under which a shareholder may be required to sell their shares. This can include events such as the death, disability, retirement, bankruptcy, or divorce of a shareholder. The provisions also specify how the purchase price will be determined, whether through a predetermined formula or a valuation process. 4. Purchase and Sale of Shares: Describing the process and procedures for buying and selling shares, including the timeline, payment terms, and any necessary approvals or consents. 5. Rights and Responsibilities of Shareholders: Enumerating the rights and obligations of each shareholder, such as voting rights, access to financial information, participation in management decisions, and non-competition agreements. 6. Dispute Resolution: Outlining a mechanism for resolving disputes between the shareholders, such as mediation or arbitration. This helps to prevent costly and time-consuming litigation. 7. Termination and Dissolution: Addressing the circumstances under which the agreement may be terminated, such as the transfer of all shares to a third party or the liquidation of the corporation. Different types of Oakland Michigan Shareholders' Agreement with buy-sell provisions can be classified based on the specific situations they address. Some potential variations include: — Oakland Michigan Shareholders' Agreement with Death Buyout Provision: Focuses on the transfer of shares in the event of a shareholder's death. — Oakland Michigan Shareholders' Agreement with Disability Buyout Provision: Specifies the process for selling shares if a shareholder becomes permanently disabled. — Oakland Michigan Shareholders' Agreement with Retirement Buyout Provision: Addresses the sale of shares when a shareholder wishes to retire from the company. — Oakland Michigan Shareholders' Agreement with Mandatory Buyout Provision: Requires a shareholder to sell their shares under specific circumstances, such as bankruptcy or breach of fiduciary duty. These are just a few examples of the types of Oakland Michigan Shareholders' Agreement that can be tailored to meet the unique needs of closely held corporations and their shareholders. It is important for shareholders to consult with an attorney experienced in corporate law to create a comprehensive agreement that best suits their specific circumstances.