{"id":4868,"date":"2016-04-04T10:47:45","date_gmt":"2016-04-04T15:47:45","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/incorporation-and-legal-structures\/shareholder-buyout-agreements.html"},"modified":"2025-10-22T23:48:00","modified_gmt":"2025-10-23T04:48:00","slug":"shareholder-buyout-agreements","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/shareholder-buyout-agreements.html","title":{"rendered":"Shareholder Buyout Agreements"},"content":{"rendered":"\n
\n

Shareholder Buyout Agreements<\/h1>\n\n
\n
\n By Jade Yeban, Esq.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last reviewed\n
\n

Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

\n

In the world of business law<\/span>, shareholder buyout agreements<\/span> play a crucial role. These agreements are also called\u00a0buy-sell agreements. They outline the rules for how shareholders can sell or transfer their shares in a business. They are key to maintaining a smooth operation and transition within a business entity. They affect majority shareholders<\/span> and minority shareholders<\/span> alike.<\/p>\n\n <\/div>\n\n\n\n

Buyout agreements or buy-sell agreements<\/span><\/u><\/a> <\/u>are used in many types of business structures. This includes corporations<\/u><\/a>, limited liability companies<\/span>, and partnerships. A buyout agreement can limit or restrict a shareholder\u2019s ability to sell or transfer shares when leaving a company.<\/p>\n

Let\u2019s dive into more information about these important agreements.<\/p>\n

Need help with business formation? Our trusted partner LegalZoom makes it easy\u2014packages start at $0 + state filing fees.<\/a><\/span><\/b><\/p>\n

What Is a Buyout Agreement?<\/h2>\n

A buyout agreement is a contract among a corporation\u2019s shareholders. It controls the transfer of shares<\/span>. These agreements outline how a shareholder can sell their business interest. This agreement is essential for both business owners<\/span> and key employees. It often includes clauses like the right of first refusal<\/span> and transfer restrictions. They might also include valuation<\/span> methods<\/span> to find the market value of the shares<\/span>.<\/p>\n

A buyout agreement determines the following:<\/p>\n