If you have not taken out insurance or if the event could not be insured (for example.B. if one of the shareholders violates the shareholder or employment contract or if it is a voluntary exit), the sale can also be purchased in cash or by a deneté loan. The agreement may take this into account and perhaps even draw up appropriate payment terms that allow sufficient time for the payment of the shares. In addition to the obvious business benefits of a buyback agreement, these agreements can also support each owner`s succession planning objectives. Succession planning objectives are: If the answer is “no,” then you should consider a shareholder purchase agreement. A well-written sales contract can help ensure the multigenerational life of a family business and also protect the family. Implementing and regularly updating a buyout contract is a smart practice for family entrepreneurs and can provide security for the future. You never know what will happen in the future, so it`s a good idea to cover as many events as possible in your sales contract. Death and Total Sustained Disability (TPD) are two of the most common events to cover, but it is also worth extending this issue to critical or long-term illness.

If you get sick, your business partners can`t estimate your family to get into the business. Companies are governed by a shareholder-elected board of directors. The Board of Directors is responsible for electing the officers responsible for the day-to-day affairs of the company. For the election of a board member to be binding, a minimum percentage of shareholders must vote for him. Unfortunately, if it is a simple majority, minority shareholders can lose their say, both in day-to-day and larger decisions, such as selling the business or merging with another company. This is why it is important to pay particular attention to the development of the company`s statutes. Ask yourself: what protection do we want to offer minority shareholders? Under what circumstances should we change the statutes? Are there situations where we need a super-majority (66%, 75% or more)? Another option in the choice of directors is to allow each shareholder to choose a director. While this approach does not have a real influence on a shareholder`s decision-making, it keeps him informed of the board`s action.