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A stock redemption agreement is a buy-sell agreement between a private corporation and its shareholders. The agreement stipulates that if a triggering event occurs, the company will purchase shares from the shareholder upon their exit from the company.
Most importantly, a stock redemption plan provides tax-free, cash resources to pay a deceased owner's surviving family for their share of the business. Without extra funds available, a business might otherwise have to liquidate or sell assets in order to stay afloat during such a challenging time.
Redemption allows investors to take profits without having to sell their shares. When investors redeem their shares, they are paid the current market price for the shares, with fewer fees or commissions. This allows investors to take profits without selling their shares and pay taxes on the gains.
Another common type of buy-sell agreement is the ?stock redemption? agreement. This is an agreement between shareholders in a company that states when a shareholder leaves the business, whether it be due to retirement, disability, death, or other reason, the departing members shares will be bought by the company.
Redemption Notice means a notice in a form approved by the Company by which a holder of Public Shares is entitled to require the Company to redeem its Public Shares, subject to any conditions contained therein.
Summary. This is a template for a membership interest redemption agreement that is a short form agreement that sets forth the terms and conditions by which a member of a limited liability company will sell its membership interest back to the company.
form agreement for the redemption of a minority membership interest in a limited liability company (LLC). This Standard Document assumes that the redeeming member is selling its entire membership interest back to the LLC at the closing of the redemption.