Buy-Sell Provisions for Shareholder Agreement
These optional buy-sell provisions can be inserted into a Shareholder Agreement to provide for the purchase and sale of shares among the shareholders of a company.
- The remaining shareholders have right of first refusal to purchase a departing shareholder's shares.
- Any buy-sell offers made during the notice period are irrevocable.
- The purchase price must be paid in full on closing.
- These Shareholder Agreement Buy-Sell Provisions are generic (not country-specific) and can be used in many jurisdictions.
- Available as a downloadable MS Word file.
Drag Along, Tag Along Clause for Shareholder Agreement
This drag along, tag along clause can be inserted into a shareholder agreement to govern how the sale of shares from a shareholder to an arm's length third party must be conducted.
- The share purchase agreement must include an offer by the buyer to purchase a pro rata share of the other shareholders' shares on the same terms and at the same time.
- The terms apply to arm's length transactions only. The clause contains a definition of which parties are not considered arm's length.
- A Drag Along, Tag Along Clause is an exit strategy that protects the rights of minority shareholders while at the same time giving majority shareholders a means to force other investors to exit at the same time.
- Available in MS Word format.
Shotgun Buy-Sell Provisions for Shareholder Agreement
Prepare a Shotgun Buy-Sell Provision for a shareholder agreement with this ready-made template.
- The shotgun provision gives a shareholder the right to offer to purchase the shares held by the other shareholders at a specified price. If they do not accept the offer, the offering party must sell its shareholdings to the remaining shareholders.
- These buy-sell provisions set out:
- the procedure to be followed by a shareholder when making an offer to purchase the other shareholders' interests,
- the terms on which any offer to purchase or offer to sell must be made,
- the rights and remedies available to the non-defaulting party upon default by either the purchaser or the seller.
- This template is available as a downloadable MS Word file.
Valuation of Shares Clause for Shareholder Agreement
Make provision for determining the fair market value of shares with this downloadable Valuation of Shares clause for a Shareholder Agreement.
- The clause sets out the process by which the fair market value (FMV) of the shares will be arrived at in the event that the shareholders cannot agree, following a triggering event which has affected the FMV of the shares.
- This form is provided in MS Word format and is fully editable.
- This clause is generic (not country-specific) and can be used in many jurisdictions.
Short Form Stock Redemption Agreement | USA
Purpose of the Stock Redemption Agreement
This downloadable short form Stock Redemption Agreement is designed to facilitate the redemption of shares in a U.S. business corporation. The agreement outlines the terms under which the corporation will purchase back shares from a specific stockholder.
Redemption of Shares
Under this agreement, the corporation consents to redeem all of the shares currently held by the designated stockholder. This process effectively removes the stockholder’s ownership interest in the company.
Tax Treatment
The redemption is structured so that the transaction will be treated as capital gains rather than ordinary income for tax purposes.
Stockholder Resignation
As part of the agreement, the stockholder will resign from any positions held as director and officer of the corporation upon the completion of the redemption.
Restriction on Future Stock Acquisition
The stockholder further agrees not to acquire additional shares of the corporation's stock for a specified period following redemption.
Format and Intended Use
This agreement is available in Microsoft Word format and is intended exclusively for use within the United States.
