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Chapter 3

A. Scope of Chapter

This chapter covers buy-sell (or “buy-out”) agreements for small, closely held corporations. The heart of this chapter is an agreement form (see §§3.48–3.73) for the purchase of the shares of a withdrawing shareholder by either the corporation (a “corporate redemption”) or the remaining shareholders (a “cross purchase”). Such a buy-out may be triggered by a variety of events, e.g., death, disability, retirement, expulsion from the business, or a desire to sell an interest in the business. Alternative provisions are included in the form to provide flexibility in tailoring the agreement to the client’s needs. The complex considerations that must be kept in mind when the agreement is being planned and executed are discussed in §§3.3–3.22, 3.40 (business law) and §§3.23–3.39, 3.41–3.45 (tax).

Here is the link to the complete chapter on Corporate Buy-Sell Agreements.

Reprinted from Business Buy-Sell Agreements, copyright 2012 by the Regents of the University of California. Reproduced with permission of Continuing Education of the Bar – California (CEB). All rights reserved. (For information about CEB publications, telephone toll free 1-800-CEB-3444 or visit our web site,