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.
West Virginia is a state located in the Appalachian region of the United States. It is known for its beautiful mountains, scenic landscapes, and rich cultural heritage. Being the 41st largest state in terms of area, West Virginia offers a variety of outdoor recreational activities such as hiking, fishing, and skiing. Within the realm of business in West Virginia, a 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 two shareholders who jointly own and operate a closely held corporation. This agreement serves as a framework to govern the relationship between these shareholders, establishing rules for decision-making, profit distribution, dispute resolution, and provisions for buy-sell transactions. Buy-sell provisions are particularly crucial as they outline the process of buying out a shareholder's interest in the company in various situations, such as retirement, death, disability, or voluntary exit. Various types of West Virginia Shareholders' Agreements between Two Shareholders of Closely Held Corporation with Buy-Sell Provisions include: 1. Buyout Agreement: This type of agreement allows one shareholder to purchase the other shareholder's ownership interest in the corporation either at a predetermined price or through a valuation process agreed upon in advance. It ensures a smooth transition of ownership in case of an unexpected event. 2. Right of First Refusal Agreement: With this provision, if a shareholder decides to sell their interest in the corporation, the other shareholder has the first opportunity to purchase that interest on the same terms and conditions offered by a third party. This clause helps maintain control and prevent unwanted individuals from joining the corporation. 3. Tag-Along Right Agreement: In this scenario, if one shareholder receives an offer to sell their interest in the corporation, the other shareholder has the right to join the transaction and sell their own shares under the same terms and conditions. This provision protects minority shareholders from being left behind in a potentially lucrative deal. 4. Drag-Along Right Agreement: Contrary to the tag-along right, this provision allows the majority shareholder(s) to force the minority shareholder(s) to sell their interest in the corporation if a third party makes an offer to purchase a substantial portion of the corporation. This provision streamlines the process of selling the company as a whole and prevents minority shareholders from blocking a potential deal. 5. Put Option Agreement: This buy-sell provision allows a shareholder to "put" their interest in the corporation to the other shareholder(s) at a predetermined price or formula in specific circumstances. This provision protects the interests of a shareholder who wishes to exit the corporation for various reasons. These different types of West Virginia Shareholders' Agreements between Two Shareholders of Closely Held Corporations with Buy-Sell Provisions provide the framework for a solid and transparent business relationship while offering flexibility and protection for each shareholder's interests.
