Setting the Price in an Close Corporation Buy-Sell Agreement

Authors

David Keith Page, Harvard University

Abstract

The stockholders of a close corporation may consider it important to keep control of the business "within the family." This can be accomplished through a restrictive agreement, typically one which gives the corporation or the remaining stockholders a first option to purchase the shares of any departing stockholder. The original owners may also wish to guarantee themselves a ready purchaser for their stock when they die or leave the business. This second objective can be attained by adopting a restrictive agreement which places an obligation on the departing stockholder to sell to the corporation or to the surviving stockholders, who in tum are obligated to buy from him. Such a mandatory scheme is commonly known as a buy-sell agreement.

Recommended Citation

David K. Page, Setting the Price in an Close Corporation Buy-Sell Agreement, 57 Mich. L. Rev. 655 (1959).
Available at: https://repository.law.umich.edu/mlr/vol57/iss5/3