Hennepin Minnesota Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder should the Beneficiaries of the Deceased Shareholder Desire to Sell such Shares

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• County: Hennepin
• Control #: US-02629BG
• 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. The Hennepin Minnesota Shareholders' Agreement with Buy-Sell Agreement, including the provision of the First Right of Refusal to Purchase the Shares of a Deceased Shareholder, offers important protection and rights to the shareholders and the corporation in case of a shareholder's demise. This agreement ensures that the beneficiaries of the deceased shareholder cannot sell their inherited shares to any third party without offering them first to the corporation. Under this agreement, the corporation is given the first opportunity to purchase the shares of a deceased shareholder if the beneficiaries wish to sell. This provision protects the corporation's interests and allows it to maintain control and stability within its ownership structure. It also offers benefits to the shareholders, ensuring fair market value for their shares and maintaining the well-being of the corporation. There are different types of Hennepin Minnesota Shareholders' Agreement with Buy-Sell Agreement Allowing the Corporation the First Right of Refusal to Purchase the Shares of a Deceased Shareholder. Some commonly used types include: 1. Cross-Purchase Agreement: This agreement requires each individual shareholder to have a predetermined obligation to purchase the shares of a deceased shareholder. The corporation is not directly involved in the purchase, and the surviving shareholders buy the shares in proportion to their ownership. 2. Entity-Purchase Agreement: In this agreement, the corporation itself is obligated to buy the shares of a deceased shareholder. The corporation uses its own funds and becomes the direct owner of the shares, redistributing them among the remaining shareholders or keeping them as treasury shares. 3. Waiting Period Agreement: This agreement stipulates a waiting period during which the corporation has the first right to purchase the shares. If the corporation chooses not to buy within this timeframe, the shares can then be sold to third parties or offered to other shareholders. 4. Stock Redemption Agreement: Under this agreement, the corporation has an obligation to redeem the shares of a deceased shareholder. The redemption can be funded through existing corporate assets or through life insurance policies on the lives of the shareholders. By implementing a Hennepin Minnesota Shareholders' Agreement with Buy-Sell Agreement Allowing the Corporation the First Right of Refusal to Purchase the Shares of a Deceased Shareholder, the corporation and the shareholders ensure that the ownership structure remains intact and that any changes in ownership are carefully managed. This agreement provides clarity, fairness, and protection for both the corporation and the beneficiaries of the deceased shareholder.

The Hennepin Minnesota Shareholders' Agreement with Buy-Sell Agreement, including the provision of the First Right of Refusal to Purchase the Shares of a Deceased Shareholder, offers important protection and rights to the shareholders and the corporation in case of a shareholder's demise. This agreement ensures that the beneficiaries of the deceased shareholder cannot sell their inherited shares to any third party without offering them first to the corporation. Under this agreement, the corporation is given the first opportunity to purchase the shares of a deceased shareholder if the beneficiaries wish to sell. This provision protects the corporation's interests and allows it to maintain control and stability within its ownership structure. It also offers benefits to the shareholders, ensuring fair market value for their shares and maintaining the well-being of the corporation. There are different types of Hennepin Minnesota Shareholders' Agreement with Buy-Sell Agreement Allowing the Corporation the First Right of Refusal to Purchase the Shares of a Deceased Shareholder. Some commonly used types include: 1. Cross-Purchase Agreement: This agreement requires each individual shareholder to have a predetermined obligation to purchase the shares of a deceased shareholder. The corporation is not directly involved in the purchase, and the surviving shareholders buy the shares in proportion to their ownership. 2. Entity-Purchase Agreement: In this agreement, the corporation itself is obligated to buy the shares of a deceased shareholder. The corporation uses its own funds and becomes the direct owner of the shares, redistributing them among the remaining shareholders or keeping them as treasury shares. 3. Waiting Period Agreement: This agreement stipulates a waiting period during which the corporation has the first right to purchase the shares. If the corporation chooses not to buy within this timeframe, the shares can then be sold to third parties or offered to other shareholders. 4. Stock Redemption Agreement: Under this agreement, the corporation has an obligation to redeem the shares of a deceased shareholder. The redemption can be funded through existing corporate assets or through life insurance policies on the lives of the shareholders. By implementing a Hennepin Minnesota Shareholders' Agreement with Buy-Sell Agreement Allowing the Corporation the First Right of Refusal to Purchase the Shares of a Deceased Shareholder, the corporation and the shareholders ensure that the ownership structure remains intact and that any changes in ownership are carefully managed. This agreement provides clarity, fairness, and protection for both the corporation and the beneficiaries of the deceased shareholder.