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.
An Idaho Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions refers to a legal document that outlines the specific rights, responsibilities, and obligations of the shareholders in a closely held corporation. This agreement is specifically designed for corporations based in Idaho and involves two shareholders who own a significant portion of the company's shares. The primary purpose of this agreement is to establish the rules and regulations that govern the relationship between the shareholders, ensuring smooth operations, decision-making, and the protection of their respective interests. With the inclusion of buy-sell provisions, the agreement also addresses the potential scenarios that may require the sale or purchase of shares between the two shareholders. The Idaho Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions typically covers the following key aspects: 1. Ownership and Share Structure: The agreement identifies the exact ownership percentage of each shareholder, highlighting their respective rights, dividends, and distributions. It also defines any special rights or preferences some shares may carry (e.g., preferred shares). 2. Voting Rights and Decision-Making: The agreement outlines the voting rights of each shareholder and the procedures for making major decisions for the corporation. It establishes the level of consent required for different types of decisions, such as changes in the corporation's bylaws, mergers, or acquisition of assets. 3. Board of Directors: If applicable, the agreement states the number of directors and the procedure for appointing them. It may also specify the right of each shareholder to nominate directors and their voting powers in electing the board. 4. Transfer of Shares: The buy-sell provisions address the situations in which a shareholder may wish to sell or transfer their shares. It includes requirements for preemptive rights, offering the shares to the other shareholder first. The agreement may also define how the purchase price of the shares will be determined, whether through a fixed valuation formula, appraisal, or by mutual agreement. 5. Right of First Refusal: In some cases, the agreement may grant the shareholder who receives an offer to purchase their shares the right to offer those shares to the other shareholder before considering external buyers. This provision ensures that existing shareholders maintain control over the corporation. 6. Shareholder Obligations and Restrictions: The agreement may detail the obligations and restrictions imposed on shareholders, such as non-compete or non-disclosure clauses, as well as any obligations to invest further capital into the company. 7. Dispute Resolution: In the event of a dispute between the shareholders, the agreement may establish a specific mechanism for resolution, such as mediation or arbitration. Different variations of Idaho Shareholders' Agreements with Buy Sell Provisions may include additional clauses and provisions depending on the specific needs and preferences of the shareholders involved. It is essential to consult with legal professionals knowledgeable about Idaho corporate law to ensure compliance and protection of the shareholders' interests.
