All counsel should identify the client for whom he or she is drafting the buy-sell agreement and , if appropriate, advise other parties involved to seek independent legal representation. Most attorneys are often asked to represent the corporation and all of its shareholders, and due care must be taken to identify and avoid possible conflicts of interest states California Business Attorney Steven C. Peck.
The following factors should be considered before beginning to draft the buy-sell agreement:
1) What events could trigger a buyout?
2) For each event triggering a buyout (e.g. death, retirement) will the corporation or the remaining shareholders, or both, be the purchaser?
3) Will the buyout be mandatory on each such event, or will the selling shareholder have the option to sell and the purchasers the option to buy?
4) How will the purchase price be established? Will it vary depending on the particular reason for the buyout?
These are just a few of the questions that should be answered by an attorney preparing a buy-sell agreement. There are many many more.
Contact Steven Peck's Premier Legal toll free at 1.866.999.9085 to talk to an experienced California Business Lawyer and visit us on-line at www.premierlegal.org
