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.
A Wisconsin Shareholders' Agreement between two shareholders of a closely-held corporation with buy-sell provisions is a legally binding contract that outlines the rights, responsibilities, and obligations of the shareholders involved. This agreement serves to safeguard the interests of the shareholders and the corporation, while providing mechanisms to address potential disputes or changes in ownership. The buy-sell provisions within this agreement allow for the orderly transfer of shares in specific circumstances, such as death, disability, retirement, or the desire to sell a shareholder's interest. These provisions ensure that the corporation and the remaining shareholder(s) have the opportunity to repurchase the shares from the departing shareholder at a predetermined price and according to a predetermined process. There are different types of Wisconsin Shareholders' Agreements between two shareholders of closely-held corporations, each with their own specific variations and considerations. Some common types include: 1. Cross-Purchase Agreement: This type of agreement requires the remaining shareholder(s) to purchase the departing shareholder's interest upon the occurrence of a triggering event. The remaining shareholder(s) directly buy the shares from the departing shareholder, usually in proportion to their existing ownership percentages. 2. Stock Redemption Agreement: In this agreement, the corporation itself purchases the shares from the departing shareholder, using corporate funds or through a predetermined financing arrangement. The corporation then retires or holds the redeemed shares, effectively reducing the overall ownership and thereby increasing the proportionate ownership of the remaining shareholder(s). 3. Hybrid Agreement: This type of agreement combines elements of both the cross-purchase and stock redemption agreements. It allows the remaining shareholder(s) and the corporation to have the option to purchase the departing shareholder's interest, depending on their respective preferences and financial situations. Regardless of the specific type, a Wisconsin Shareholders' Agreement with buy-sell provisions typically includes clauses regarding the valuation of shares, financing arrangements, dispute resolution mechanisms, non-compete and confidentiality provisions, and other essential terms that govern the relationship between the shareholders and the corporation. It is important for shareholders of closely-held corporations in Wisconsin to consult with attorneys experienced in corporate law to draft and customize a Shareholders' Agreement that suits their specific needs and objectives. Professional guidance will ensure compliance with Wisconsin state laws and help protect the interests of all parties involved in the corporation.
