Home » Texas Articles » A Buyout Agreement, Also Called a "Buy-Sell Agreement," is a Contract Between Shareholders or Partners in a Business
A Buyout Agreement, Also Called a "Buy-Sell Agreement," is a Contract Between Shareholders or Partners in a Business
It prevents unwanted buyers from gaining control through either a forced sale provision or an option provision. In an option situation, certain triggering events give a corporation the right to buy shares.
IRVING, TX, November 30, 2011 /Texas PR News/ -- A buyout agreement, also called a "buy-sell agreement," is a contract between shareholders or partners in a business. It prevents unwanted buyers from gaining control through either a forced sale provision or an option provision. In an option situation, certain triggering events give a corporation the right to buy shares. In a forced sale, the company must buy the leaving or retiring partner's interest in a business, possibly within a certain timeframe and at a predetermined price.
Aside from excluding unwanted buyers, a buyout agreement may protect the company from dissolution. Some states require dissolution of a limited liability company (LLC) if one partner leaves. A buyout agreement also specifies the method to be used in valuing the shares and the terms of payment to the selling shareholder.
Events That Can Trigger a Buyout
Certain life events can significantly affect a group of partners or shareholders. Most buyout agreements contain provisions triggered by the following events:
- Loss of employment: Can force a fired employee to sell back his or her shares to the company to prevent the employee from having access to private company information
- Retirement: May give the company the right to take back an inactive shareholder's interest when the shareholder reaches a certain age
- Personal bankruptcy: Usually lets the company buy a bankrupt shareholder's shares
- Divorce: Can require a shareholder's former spouse to sell his or her shares back to the company
- Disability: A permanently disabled shareholder may be forced to sell his or her shares to the company
- Death: The family of a deceased shareholder may have to sell inherited shares back to the company
The circumstances of each company are unique and each buyout agreement should be as well. If your company does not have a buyout agreement in place, contact an experienced attorney specializing in business organizations to discuss your specific situation.
For more information, please visit Schachter Harris original article:
http://www.schachterharris.com/Articles/Protecting-Your-Company-With- ... ment.shtml
---
Press release service and press release distribution provided by http://www.24-7pressrelease.com |
|
|
Press Release Contact Information:
Ray Harris
Findlaw
PR
400 E. Las Colinas Blvd.
Irving, TX
United States 75039
Voice: 214.999.5700
Website: Visit Our Website |
|
|
|
|
|
|
Advertise With Us |
About Us |
Contact Us