Houston Texas 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
• City: Houston
• 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. Houston, Texas Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder A Houston, Texas Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder is a legally binding contract that governs the relationship between shareholders in a corporation based in Houston, Texas. This agreement is particularly important in situations where a shareholder passes away, and their beneficiaries wish to sell their shares in the corporation. The main purpose of this agreement is to provide a mechanism that allows the corporation to have the first option to buy the shares of a deceased shareholder. This ensures that the corporation maintains control over its ownership structure and prevents unwanted third parties from becoming shareholders without the consent of the corporation. Under this agreement, when a shareholder passes away, their beneficiaries must first offer the shares for sale to the corporation. The corporation then has the right to purchase the shares at a fair and reasonable price, as determined by an independent valuation process or by agreement between the parties involved. This process is commonly known as the "first right of refusal." There are different types of Houston, Texas Shareholders' Agreements with Buy-Sell Agreements Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder. Some variations may include: 1. Cross-Purchase Agreement: This type of agreement allows the remaining shareholders within the corporation to purchase the shares of the deceased shareholder directly. It ensures that the remaining shareholders have the opportunity to maintain proportional ownership in the corporation. 2. Stock Redemption Agreement: This agreement allows the corporation itself to repurchase the shares of the deceased shareholder. The corporation can then retire or reissue these shares as necessary. 3. Wait-and-See Agreement: This agreement combines elements of both the cross-purchase and stock redemption agreements. It grants the remaining shareholders the option to purchase the shares initially, but if they decline, the corporation can step in and buy the shares. The specifics of the Houston, Texas Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder may vary depending on the unique requirements and preferences of the corporation and its shareholders. It is highly recommended that legal professionals specializing in corporate law are consulted to draft and customize the agreement accordingly. By having such an agreement in place, Houston, Texas corporations can protect their ownership structure, avoid potential disputes, and ensure a smooth transition of ownership in the event of a shareholder's demise.

Houston, Texas Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder A Houston, Texas Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder is a legally binding contract that governs the relationship between shareholders in a corporation based in Houston, Texas. This agreement is particularly important in situations where a shareholder passes away, and their beneficiaries wish to sell their shares in the corporation. The main purpose of this agreement is to provide a mechanism that allows the corporation to have the first option to buy the shares of a deceased shareholder. This ensures that the corporation maintains control over its ownership structure and prevents unwanted third parties from becoming shareholders without the consent of the corporation. Under this agreement, when a shareholder passes away, their beneficiaries must first offer the shares for sale to the corporation. The corporation then has the right to purchase the shares at a fair and reasonable price, as determined by an independent valuation process or by agreement between the parties involved. This process is commonly known as the "first right of refusal." There are different types of Houston, Texas Shareholders' Agreements with Buy-Sell Agreements Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder. Some variations may include: 1. Cross-Purchase Agreement: This type of agreement allows the remaining shareholders within the corporation to purchase the shares of the deceased shareholder directly. It ensures that the remaining shareholders have the opportunity to maintain proportional ownership in the corporation. 2. Stock Redemption Agreement: This agreement allows the corporation itself to repurchase the shares of the deceased shareholder. The corporation can then retire or reissue these shares as necessary. 3. Wait-and-See Agreement: This agreement combines elements of both the cross-purchase and stock redemption agreements. It grants the remaining shareholders the option to purchase the shares initially, but if they decline, the corporation can step in and buy the shares. The specifics of the Houston, Texas Shareholders' Agreement with Buy-Sell Agreement Allowing Corporation the First Right of Refusal to Purchase the Shares of Deceased Shareholder may vary depending on the unique requirements and preferences of the corporation and its shareholders. It is highly recommended that legal professionals specializing in corporate law are consulted to draft and customize the agreement accordingly. By having such an agreement in place, Houston, Texas corporations can protect their ownership structure, avoid potential disputes, and ensure a smooth transition of ownership in the event of a shareholder's demise.