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Setting The Price In An Close Corporation Buy-Sell Agreement, David Keith Page
Setting The Price In An Close Corporation Buy-Sell Agreement, David Keith Page
Michigan Law Review
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 …
Corporations-Shares Of Stock-Reasonableness Of Restriction On Transfer Of Shares, E. Blythe Stason, Jr.
Corporations-Shares Of Stock-Reasonableness Of Restriction On Transfer Of Shares, E. Blythe Stason, Jr.
Michigan Law Review
Defendant corporation's by-laws provided, inter alia, that shareholders wishing to dispose of their shares must, in absence of contrary agreement with the remaining shareholders, give latter an option to buy at a price equal to book value, regardless of market value of these shares. This restriction was not set forth in the share certificates as required by statute. On refusal of defendant corporation to permit transfer of its shares except in compliance with the terms of the by-law, complainants brought suit for declaratory judgment, and obtained a finding that these terms were void. Held, affirmed. The by-law restriction violated …