Shareholders Agreement for S Corporation | USA

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.

Key Provisions

• 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.

Jurisdiction and Format

These Shareholder Agreement Buy-Sell Provisions are generic (not country-specific) and can be used in many jurisdictions. The template is provided as a downloadable and fully editable MS Word file.

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.

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.

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.