Title: North Dakota Shareholders' Buy-Sell Agreement of Stock in a Close Corporation with Agreement of Spouse Introduction: A Shareholders' Buy-Sell Agreement is a crucial legal document for close corporations in North Dakota. This agreement outlines the terms and conditions for shareholders looking to buy or sell their stock within the corporation, while also addressing the involvement and agreement of their spouses. In North Dakota, there are several types of Shareholders' Buy-Sell Agreements with specific variations based on the circumstances. Let's delve into the comprehensive details of this agreement. Key terms: 1. Shareholders' Buy-Sell Agreement 2. Stock 3. Close Corporation 4. Agreement of Spouse 5. North Dakota 6. Corporation Shareholders 7. Stock Buy-Sell Options Types of North Dakota Shareholders' Buy-Sell Agreements: 1. Traditional Buy-Sell Agreement: The traditional Buy-Sell Agreement allows shareholders, with the agreement of their spouses, to outline predetermined terms for the transfer of stock ownership. This agreement typically includes terms like purchase price, payment methods, triggering events (such as death, disability, retirement), and provisions for the spouse's consent. 2. Entity-Purchase Agreement: The Entity-Purchase Agreement is one type of Buy-Sell Agreement where the corporation itself is mandated to buy the stock of a departing shareholder. This agreement can offer advantages such as favorable tax treatment to the remaining shareholders, as the corporation is the purchasing entity. 3. Cross-Purchase Agreement: In contrast to an Entity-Purchase Agreement, a Cross-Purchase Agreement involves individual shareholders purchasing the stock of a departing shareholder. This agreement is usually selected when there are a limited number of shareholders, and it helps maintain the proportional ownership distribution. 4. Wait-and-See Agreement: A Wait-and-See Agreement provides flexibility to shareholders as it allows them to choose between an Entity-Purchase Agreement or a Cross-Purchase Agreement when a triggering event occurs. This type of agreement enables the shareholders to evaluate prevailing circumstances at that time before finalizing the purchase arrangements. Key Components of North Dakota Shareholders' Buy-Sell Agreement: 1. Spousal Consent: North Dakota law requires the agreement to include the spouse's explicit consent since stock ownership could potentially affect marital property rights. The spouse's signature acknowledges their approval and understanding of the transaction. 2. Valuation of Stock: The agreement should address the method for valuing the stock being bought or sold, considering factors such as book value, fair market value, or an independent appraiser's assessment. The chosen valuation method should be specified to avoid future disputes. 3. Triggering Events: Triggering events, such as death, disability, retirement, divorce, or voluntary sale, should be clearly defined and detailed in the agreement. Clauses concerning these events should outline the specific conditions that initiate the stock buy-sell process. 4. Funding Mechanisms: The agreement should stipulate how the buying and selling transactions will be funded, such as through cash reserves, promissory notes, insurance policies, or a combination of these options. Conclusion: North Dakota Shareholders' Buy-Sell Agreement of Stock in a Close Corporation with Agreement of Spouse is a legally binding document that provides clear guidelines for shareholders within a close corporation. Having a well-drafted agreement ensures an orderly transfer of stock, mitigating the risk of disputes or unforeseen issues. It is imperative for shareholders to consult legal professionals while crafting this agreement to address the specific needs and circumstances of their close corporation and maintain compliance with North Dakota laws.
North Dakota Shareholders Buy Sell Agreement of Stock in a Close Corporation with Agreement of Spouse
Description
How to fill out North Dakota Shareholders Buy Sell Agreement Of Stock In A Close Corporation With Agreement Of Spouse?
You can devote hours online attempting to find the legitimate file format that meets the federal and state specifications you need. US Legal Forms supplies a huge number of legitimate forms which can be analyzed by specialists. You can easily down load or print the North Dakota Shareholders Buy Sell Agreement of Stock in a Close Corporation with Agreement of Spouse from our assistance.
If you already have a US Legal Forms profile, it is possible to log in and click the Acquire button. Following that, it is possible to full, change, print, or signal the North Dakota Shareholders Buy Sell Agreement of Stock in a Close Corporation with Agreement of Spouse. Every single legitimate file format you purchase is your own eternally. To have an additional version of any bought kind, visit the My Forms tab and click the related button.
If you are using the US Legal Forms site for the first time, adhere to the straightforward guidelines beneath:
- Very first, make certain you have chosen the proper file format for the county/town of your choosing. Look at the kind outline to make sure you have picked the right kind. If accessible, use the Preview button to appear with the file format too.
- If you want to discover an additional model of your kind, use the Lookup discipline to obtain the format that meets your needs and specifications.
- Upon having identified the format you need, just click Buy now to proceed.
- Pick the prices prepare you need, enter your qualifications, and register for a free account on US Legal Forms.
- Total the transaction. You should use your charge card or PayPal profile to cover the legitimate kind.
- Pick the file format of your file and down load it to your device.
- Make changes to your file if necessary. You can full, change and signal and print North Dakota Shareholders Buy Sell Agreement of Stock in a Close Corporation with Agreement of Spouse.
Acquire and print a huge number of file themes using the US Legal Forms Internet site, that offers the largest selection of legitimate forms. Use expert and status-particular themes to tackle your small business or specific needs.
Form popularity
FAQ
Buy-sell agreements, also called buyout agreements and shareholder agreements, are legally binding documents between two business partners that govern how business interests are treated if one partner leaves unexpectedly.
The business owners individually own the policies insuring each other's lives. When a business owner dies, the proceeds are paid to those surviving owners who hold one or more policies on the deceased owner, and these surviving owners buy the shares from the deceased owner's personal representative.
A shareholder agreement, on the other hand, is optional. This document is often by and for shareholders, outlining certain rights and obligations. It can be most helpful when a corporation has a small number of active shareholders.
A shareholder agreement, on the other hand, is optional. This document is often by and for shareholders, outlining certain rights and obligations. It can be most helpful when a corporation has a small number of active shareholders.
Entity-purchase agreement Under an entity-purchase plan, the business purchases an owner's entire interest at an agreed-upon price if and when a triggering event occurs. If the business is a corporation, the plan is referred to as a stock redemption agreement.
What happens with no shareholders' agreement? With no shareholders' agreement, both the company as a whole and individual shareholders could be exposed to unresolvable future conflict. Without an agreement to clarify the legal standpoint of each party, if a dispute occurs, a deadlock situation could occur.
Definition. 1. A buy-sell agreement is an agreement among the owners of the business and the entity. 2. The buy-sell agreement usually provides for the purchase and sale of ownership interests in the business at a price determined in accordance with the agreement, upon the occurrence of certain (usually future) events.
A buyout agreement is a contract between the shareholders of a company. The agreement determines whether a company must buyout a departing shareholder or whether a company has the right to buyout a shareholder when a certain event, such as a shareholder's death, occurs.
The sale of the shares may be accomplished in two very different ways. First, each shareholder can agree to purchase, pro rata or otherwise, all the stock being sold. This is called a "cross purchase" of stock.
To buyout a shareholder, a company must be able to pay for the value of the ownership interest. A company can fund the purchase of a shareholder's interest by using: The Assets of the Business: A buyout agreement may stipulate that the company can pay over time with the income earned from the business.