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.
Virginia Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions is a legally binding contract that outlines the rights and obligations of two shareholders who own a significant portion of a closely held corporation. This agreement serves to protect the interests of both shareholders and provides a framework for resolving potential disputes that may arise in the future. The primary objective of this agreement is to establish a mechanism for the buying and selling of shares in the event of certain triggering events, such as death, disability, retirement, or disagreement between the shareholders. The agreement sets out the terms and conditions under which such transfers can occur, ensuring a smooth transition of ownership and minimizing disruption to the business. In a Virginia Shareholders' Agreement between Two Shareholders of a Closely Held Corporation with Buy Sell Provisions, there can be various types of provisions depending on the specific needs and requirements of the shareholders. Some of these provisions include: 1. Right of First Refusal: This provision grants the non-selling shareholder(s) the right to purchase the shares being offered for sale before they can be sold to a third party. It ensures that existing shareholders have the opportunity to maintain their ownership percentage and prevent the entry of unwanted individuals or entities into the corporation. 2. Put Option: With this provision, a shareholder can compel the other shareholder(s) to buy their shares at a predetermined price. This option is often triggered by specific events outlined in the agreement, such as retirement or disability, allowing the selling shareholder to liquidate their investment. 3. Call Option: This provision allows one shareholder to compel the other to sell their shares at a predetermined price. It can be triggered by events like breach of certain contractual obligations or actions detrimental to the corporation's interests. 4. Drag Along Rights: This clause enables a majority shareholder to force a minority shareholder to sell their shares alongside them in the event of a sale of the entire company. This provision prevents minority shareholders from obstructing a potential sale of the corporation. 5. Tag Along Rights: This provision protects minority shareholders by granting them the right to "tag along" and sell their shares alongside a majority shareholder in the event of a sale. It allows minority shareholders to participate in a transaction that they might otherwise be excluded from. Virginia Shareholders' Agreement between Two Shareholders of Closely Held Corporation with Buy Sell Provisions aims to provide clarity, protect the interests of the shareholders, and ensure a fair resolution of any disputes or changes in ownership. It is essential for shareholders in closely held corporations to consider such agreements as they provide a solid foundation for the smooth functioning and longevity of the corporation.
