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 Illinois Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a legally binding document that outlines the rights, obligations, and responsibilities of two shareholders in an Illinois-based closely held corporation. This agreement serves to protect the interests of both shareholders and provides mechanisms for resolving disputes and facilitating the transfer of shares under specific circumstances. Key terms and provisions commonly included in such agreements are: 1. Buy-Sell Provisions: This clause outlines the conditions and procedures for selling or transferring shares between the shareholders. It includes provisions for first right of refusal, mandatory buyouts, and valuation methods for determining the share price. 2. Ownership and Voting Rights: This section defines the ownership percentages of each shareholder and the corresponding voting rights within the corporation. It may also include restrictions on transferring shares outside the agreement, ensuring control remains within the closely held corporation. 3. Management and Decision-Making: The agreement may establish guidelines on how major decisions, such as changes in the company's capital structure, appointment of officers, or approval of certain corporate actions, should be made. It may also designate specific roles and responsibilities for each shareholder. 4. Dividends and Distributions: This provision outlines the rules for distributing profits and dividends among the shareholders, including the frequency and method of distribution. 5. Dispute Resolution: A mechanism for resolving any disputes arising between the shareholders is typically included in the agreement. This may involve mediation, arbitration, or litigation. 6. Non-Competition and Non-Disclosure: The agreement may include provisions that restrict shareholders from engaging in activities that compete with the corporation and require confidentiality of proprietary information. 7. Termination and Succession: This section addresses the conditions and procedures for terminating the agreement, including a provision for the death, disability, or retirement of one of the shareholders. It may also outline the mechanisms for transferring shares to heirs or successors. Different variations of Illinois Shareholders' Agreements between Two Shareholders of Closely Held Corporations with Buy Sell Provisions may include agreements specifically tailored for different business sectors. For instance, there may be variations for professional service firms, technology companies, manufacturing entities, or family-owned businesses. The names of these variations may change depending on the specific industry or circumstances they are designed for, but they would still contain similar key provisions and objectives.
