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Aug 6th, 2022
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Although the specific provisions may vary depending upon the needs of the business and its owners, the purpose of a buy-sell agreement is to provide for an orderly buyout process when there is a triggering event. A stock redemption agreement is a buy-sell agreement between a private corporation and its shareholders.
Share repurchases are a popular method for returning cash to shareholders and are strictly voluntary on the part of the shareholder. Redemptions are when a company requires shareholders to sell a portion of their shares back to the company.
Redemption Contract means the Redemption and Clearing Agreement to be entered into between the Issuer, the Offshore Notes Issuer and the Trustee.
If the distribution is treated as a dividend, the amount of the distribution is considered ordinary income. A redemption is treated as a sale or exchange in the following situations: The distribution is not essentially equivalent to a dividend. It is substantially disproportionate with respect to the shareholder.
A short-form agreement for the redemption of a minority membership interest in a limited liability company (LLC). This Standard Document assumes that the redeeming member is selling its entire membership interest back to the LLC at the closing of the redemption.
The redemption definition for mutual funds means the investor is selling some or all of their funds for cash, and their redemption options can be unit-based, amount-based, or redeem all. Redemptions are calculated based on the number of units that an investor holds, by the net asset value prevailing for that day.
A redemption agreement is a legal contract between a corporation and its shareholders that specifies how the corporation can buy back the shares of a departing shareholder. The agreement usually sets the price, timing, and method of payment for the repurchase.
A REDEMPTION AGREEMENT ALLOWS A DEPARTING SHAREHOLDER, PARTNER OR LLC MEMBER TO SELL OUT THEIR INTEREST IN THE BUSINESS TO THE COMPANY INSTEAD OF THEIR CO-OWNER. Another common type of buy-sell agreement is the stock redemption agreement.

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