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.
Oklahoma Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions: A Comprehensive Guide Introduction: In Oklahoma, a Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a legally binding document that outlines the rights, responsibilities, and obligations of the shareholders involved. This agreement is crucial for closely held corporations to establish a clear framework governing their relationship while safeguarding their respective interests. Key Provisions: 1. Buy Sell Provisions: The cornerstone of this agreement is the inclusion of buy sell provisions, which provide mechanisms for the transfer of shares between the shareholders. These provisions can be triggered by various events, including death, disability, retirement, divorce, or disagreement between the shareholders. 2. Purchase Price Determination: The agreement should outline how the purchase price for the shares will be determined, ensuring a fair valuation method that avoids disputes. Common methods include appraisal by an independent expert, book value, or a pre-determined formula. 3. Right of First Refusal: This provision grants the non-selling shareholder the first opportunity to purchase the shares before they are offered to any third party. It helps maintain ownership control within the corporation and prevents unwanted external parties from becoming shareholders. 4. Tag-Along Rights: This provision ensures that minority shareholders have the right to "tag along" and sell their shares alongside the majority shareholder if they receive an offer for their shares. This protects minority shareholders from being left behind in case of a major share transfer. 5. Drag-Along Rights: Conversely, drag-along rights empower the majority shareholder to force the minority shareholder(s) to sell their shares along with theirs if they receive an offer for their shares. This provision is commonly used to facilitate a sale or merger of the corporation as a whole. 6. Restrictions on Transfer: The agreement may impose restrictions on the transfer of shares, including prohibiting transfers to certain individuals or entities or requiring shareholder approval for any transfers. Such restrictions help maintain stability and control within the corporation. Types of Oklahoma Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions: 1. Standard Shareholders' Agreement: This is a basic agreement that covers the fundamental provisions mentioned above, providing a comprehensive framework for the two shareholders' relationship. 2. Tailored Shareholders' Agreement: This type of agreement allows the shareholders to customize certain provisions to align with their unique circumstances and needs. It may include additional provisions related to specific situations or industry-specific regulations. 3. Active/Passive Shareholders' Agreement: In cases where one shareholder is actively involved in managing the corporation while the other remains mostly passive, an agreement can be tailored to accommodate their differing roles and responsibilities. Conclusion: Having a well-drafted Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions is crucial for business owners in Oklahoma. It not only protects their rights and interests but also ensures a smooth transfer of shares under various circumstances. Whether opting for a standard or tailored agreement, consulting with legal professionals is highly recommended ensuring compliance with local laws and to cover all necessary provisions relevant to the specific corporation's requirements.
