Thursday, 22 June 2017

4 Reasons you need a Shareholder Buyout Agreement



Shareholder Buyout Agreements or Sell-Buy agreements are contracts that determine how shares can be sold and bought within the organisation. A buyout agreement regulates whether a departing shareholder’s stocks can be bought, the mode of its purchase, the representative responsible for making the purchase and other conditions that can trigger a similar situation.

These agreements are crucial documents for avoiding shareholders’ conflicts and a situation of crisis in the case a majority shareholder goes bankrupt. However, despite their significance, many companies overlook the filing and amendment of the sell-buy agreements, leading to legal troubles in the future.

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