There are many reasons why shareholders in closely-held corporationsmay need to quickly sell their shares to others. Therefore, it’s important when drafting a shareholder’s agreement to cover every basic aspect of buying and selling shares – in addition to the general administrative matters that must normally be addressed.
Depending on a corporation’s number of major shareholders and business pursuits, a flexible framework helps facilitate every goal. The following list sets forth some of the main terms that shareholder agreements should cover, separate and apart from the buy-sell provisions that will be discussed in greater detail below.
Common Administrative Topics Set Forth in Many Shareholder Agreements
Basic Buy-Sell Provisions – Events That Often Trigger Their Use
Your shareholder’s agreement should always include a very detailed explanation of how shares should be sold when one of the following events takes place.
Should the Selling of Shares Be Mandatory — or Provide Parties with Greater Choice?
When trying to answer this question, you may want to provide different answers, depending on whether the sales are to the corporation itself, other shareholders – or to third parties.
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