What is the contract? The model agreement can be printed on ten pages. Do you want to sell a member`s stake in a nearby company (CC) to another person? It is easy to make and sell shares in a very similar company. For example, a person owns 100% of the stake in a CC and wants to sell the CC to another person. Or two people each own 50% and one of them sells his 50% to another person. They would enter into a member sale agreement that would govern the sale. Remember that only a natural person or trust can be a member of a CC. PLEASE NOTE that this Agreement shall be used either in connection with the unilateral obligation of confidentiality that the Seller may require of the Buyer, or with the bilateral confidentiality agreement that both Parties may require of the Other; These last two legal documents are available on this site and their conclusion is a condition precedent of the sales contract. Ensure that the required confidentiality document is purchased and that PRIOR is executed upon conclusion of the sales contract. Please also ensure that the necessary obligation of individual confidentiality is acquired. The Association Agreement shall in principle lay down all the rights and obligations of each member.
It determines the percentage of membership in the Close Corporation each member, what each member can and cannot do, can and cannot, voting rights, essentially everything that governs the agreement between the members and Close Corporation. What does the agreement say? The model sales contract consists of parts; definitions; the sale of the member`s interests; conditions precedent; the purchase price and payment; the provision of documents; guarantees; compensation; offence; trade restrictions; confidentiality; dispute resolution; preferential duty; notifications; Generally speaking. Why do I need an agreement to sell members` interests? A written agreement on the sale of the member`s interest in a CC sets out the terms of the sale of a member`s equity to an existing member of Close Corporation. A number of issues must be negotiated during the sale of a Close Corporation`s equity, such as. B the purchase price, the discount process, confidentiality and restrictions. These issues should be included in the written contract for the sale of members` interests in order to remove uncertainties and ensure that sellers and buyers understand their respective rights and obligations during the sale. One of the most important issues to deal with in an association agreement is what should happen if a member wishes to leave Close Corporation and dispose of their shares. This also applies in the event of the death of a member.
In addition, the agreement must define what will happen to the member`s interests if the members decide to close (cancel) or sell Close Corporation. By “what to do with a member`s interest,” we first see the value of the interest; The agreement must specify how this value is determined and when exactly this value is determined (for example. B on the day of resignation; on the eve of death) and by whom the value is determined. . . .