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.
North Dakota Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions A North Dakota Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions is a legally binding contract that outlines the rights, responsibilities, and obligations of the shareholders in a closely held corporation located within the state of North Dakota. This type of agreement is specifically designed for situations where there are only two shareholders involved in the corporation. The primary purpose of this agreement is to establish a framework for the operation and management of the corporation while also addressing potential buy and sell provisions. In the event that one shareholder wishes to sell their shares or if certain triggering events occur, such as death, disability, retirement, or divorce, the agreement contains provisions that outline the process for the buyout or transfer of shares between the shareholders. The key components of a North Dakota Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions include: 1. Ownership Structure: The agreement will clearly state the percentage of shares owned by each shareholder and address any restrictions or limitations on the transfer of shares. 2. Decision-Making Authority: The agreement will outline the decision-making process, including voting rights, board representation, and the procedures for resolving disputes between shareholders. 3. Buyout Provisions: The agreement will specify the circumstances under which a shareholder may be required to sell their shares, and the methods for determining the purchase price and terms of the buyout. 4. Triggering Events: The agreement will cover specific events that may trigger a buyout, such as death, disability, retirement, or divorce, and establish procedures for handling these situations. 5. Right of First Refusal: The agreement may include a provision granting the remaining shareholder the right of first refusal to purchase the shares if the other shareholder decides to sell. 6. Valuation Methods: The agreement will detail the methods for valuing the shares in the event of a buyout, including potential appraisals, book value, or formula-based calculations. 7. Non-Compete and Confidentiality: The agreement may include clauses that restrict shareholders from engaging in competitive activities or disclosing proprietary information about the corporation. Types of North Dakota Shareholders' Agreements between Two Shareholders of Closely Held Corporation with Buy Sell Provisions: 1. Standard Buy-Sell Agreement: This is the most common type of agreement that includes provisions for buyout scenarios triggered by certain events, such as death or disability. 2. Cross-Purchase Agreement: In this agreement, each shareholder has the option to purchase the other shareholder's shares in the event of a triggering event, increasing their ownership percentage. 3. Redemption Agreement: In a redemption agreement, the corporation has the option to purchase the shares of the departing shareholder, effectively retiring those shares. It is important for shareholders in a closely held corporation in North Dakota to have a comprehensive Shareholders' Agreement in place to protect their rights, clarify ownership structure, and provide a clear roadmap for the buyout or transfer of shares in various scenarios. Consulting with a legal professional experienced in corporate law is highly recommended ensuring that the agreement is tailored to the specific needs and circumstances of the shareholders and the corporation.
