Shareholder Agreement Closely Held Corporation Template for United States

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Key Requirements PROMPT example:

Shareholder Agreement Closely Held Corporation

"I need a Shareholder Agreement for a Closely Held Corporation for my family-owned manufacturing business with three shareholders, including specific provisions for succession planning and a requirement that any share transfers must first be offered to family members."

Document background

A Shareholder Agreement for a Closely Held Corporation is essential when establishing or maintaining a private corporation with a limited number of shareholders in the United States. This document becomes necessary when shareholders want to formalize their relationships, protect their interests, and establish clear protocols for business operations and ownership transfers. It addresses crucial aspects such as share transfer restrictions, voting rights, management participation, dispute resolution, and exit strategies. The agreement must comply with both federal securities laws and state-specific corporate regulations, making it a fundamental document for closely held corporations seeking to maintain stable and well-defined shareholder relationships.

Suggested Sections

1. Parties: Identification of all shareholders and the corporation

2. Background: Context of the agreement and formation of the corporation

3. Definitions: Key terms used throughout the agreement

4. Share Ownership and Capital Structure: Details of share classes, rights, and ownership distribution

5. Management and Control: Governance structure, voting rights, and decision-making processes

6. Transfer Restrictions: Limitations on share transfers and right of first refusal provisions

7. Buy-Sell Provisions: Terms for purchase of shares upon specific trigger events

Optional Sections

1. Tag-Along Rights: Rights of minority shareholders to join in sale of shares when majority shareholders sell their shares

2. Drag-Along Rights: Rights of majority shareholders to force minority shareholders to join in the sale of the company

3. Employment Provisions: Terms and conditions regarding shareholder employment in the corporation, including roles and responsibilities

4. Non-Compete Provisions: Restrictions on competitive activities by shareholders during and after their involvement with the corporation

Suggested Schedules

1. Schedule A - Current Shareholdings: Detailed breakdown of current share ownership and distribution

2. Schedule B - Valuation Method: Agreed methodology for share valuation in case of transfers or buyouts

3. Schedule C - Reserved Matters: List of decisions requiring special majority or unanimous consent

4. Schedule D - Form of Share Transfer Notice: Template for notifying intent to transfer shares

5. Appendix 1 - Corporate Bylaws: Copy of current corporate bylaws referenced in the agreement

6. Appendix 2 - Share Certificates: Copies of current share certificates issued to shareholders

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Family Business
Professional Services
Technology
Manufacturing
Retail

Relevant Teams

Legal
Executive Leadership
Finance
Corporate Governance
Board of Directors

Relevant Roles

Chief Executive Officer
Chief Financial Officer
Corporate Secretary
General Counsel
Board Member

Industries

Securities Acts: Securities Act of 1933 and Securities Exchange Act of 1934 - Federal laws governing securities issuance, trading, and disclosure requirements

Internal Revenue Code: Federal tax regulations affecting corporate structure, stock transfers, and shareholder distributions

Federal Close Corporation Guidelines: Federal guidelines specifically addressing the formation and operation of closely held corporations

State Corporation Laws: State-specific laws governing corporate formation, operation, and dissolution, varying by jurisdiction

Blue Sky Laws: State-level securities laws regulating the offering and sale of securities to protect investors from fraudulent activities

State Business Corporation Acts: Comprehensive state statutes governing corporate operations, shareholder rights, and corporate governance

Uniform Commercial Code: Standardized state laws governing commercial transactions, including security interests and transfer of rights

Corporate Governance Requirements: Legal requirements for corporate decision-making, board operations, and shareholder meetings

Fiduciary Duties: Legal obligations of loyalty, care, and good faith owed by directors and officers to the corporation and shareholders

Securities Registration Requirements: Federal and state requirements for registering securities offerings, including applicable exemptions for closely held corporations

Transfer Restrictions: Legal framework governing limitations on stock transfers in closely held corporations

Buy-Sell Provisions: Legal requirements for structuring and implementing share purchase agreements between shareholders

SEC Regulations: Federal regulations governing securities transactions, reporting requirements, and corporate compliance

State Securities Regulations: State-specific rules and requirements for securities transactions and corporate compliance

IRS Regulations: Federal tax regulations specifically addressing stock valuations and transfer taxation in closely held corporations

Minority Shareholder Rights: Case law and statutory protections for minority shareholders in closely held corporations

Find the exact document you need

Stock Purchase Agreement Between Shareholders

A U.S.-governed agreement facilitating the transfer of company shares between existing shareholders, outlining terms, conditions, and protections for all parties involved.

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Let's create your Shareholder Agreement Closely Held Corporation

Authors

Alex Denne

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Commercial

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Industries

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