Small Business Your Leading Source For Legal Information.
Agreements Identify potential problem areas before entering a buy-sell agreement.
Any transaction involving the purchase and sale of a corporation contains areas of potential and costly conflicts. The following checklist will enable purchasing and selling parties to deal with potential problem areas at the time the transaction is entered into so as to avoid possible future litigation. There should be a statement in the buy-sell agreement to the effect that it supersedes all other existing agreements to redeem stock or purchase stock executed by the shareholders. In the event of a death buy-out, will all the proceeds from the policy be used to redeem the stock of the deceased shareholder. These agreements may also give the corporation or shareholders the right of first refusal should the stock become available due to the death of a shareholder or because a shareholder wishes to sell her stock.