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The Brass Tacks of a Corporation Buy-Out

The Brass Tacks of a Corporation Buy-Out

By Nina Kaufman, Esq.

When a shareholder in a multiple-owner company decides to withdraw from a corporation, her shares need to be transferred.  But to whom?  And how?  It depends on how the shareholder’s agreement is worded. Two scenarios are: A shareholder retires and sells the shares to the remaining shareholder(s) A shareholder resigns and sells the shares back to the corporation The first method is sometimes referred to as a “cross-purchase agreement.”  Under a cross-purchase agreement, the shareholders agree to buy each other out when one withdraws.  The corporation is not part of the purchase/sale. The second scenario, sometimes referred to as a “stock redemption,” is where the corporation — not the individual shareholders — buy back the stock. The downside to #1:  the individual shareholders need to come up with the funds for the buyout.  Under #2, the corporation comes up with the funds.  In both situations, life insurance proceeds can be used . . . but that doesn’t help when an owner, say, resigns, and remains very much alive.  That’s why your shareholder agreement needs to have a…

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Nina Kaufman

Flying solo doesn’t have to mean going it alone.

I’m Nina Kaufman.

I know first-hand that running a knowledge-based service business has unique challenges. It’s so much easier when you have an advocate in your corner. Over the past 25 years, I’ve worked with thousands of New York business professionals who want a legal advisor to guide and support them as they navigate the business world.

With wide-ranging experience as a business attorney, strategist, and media authority, I bring the added power of a business lens to the legal issues my clients are facing.

And because I’ve been a business owner myself, I’ve lived through the soaring highs and devastating lows – like when my first law firm failed. So I understand what’s involved to serve great clients, detect business risks early and build a true legacy.

I can’t get those 12 years back. That’s why I have made it my mission to ensure that business professionals like you can become wise and discerning leaders, build a solid business, and live your best life.