33 Pages Posted: 2 May 2007
A buy-out of a shareholder's stock is a sale of his stock holdings in a specific corporation pursuant to a pre-existing contract. The focus of this Article is on mandatory agreements taking effect upon the death of a shareholder. The purpose of this Article is to delineate some of the most important tax and corporate law considerations and to examine various methods of financing buy-outs. It will place particular emphasis on the merits and disadvantages of funding by means of life insurance.
Keywords: Taxation, Buy-Out, Closely Held Corporation, Life Insurance
JEL Classification: H20, H25
Suggested Citation: Suggested Citation
Kahn, Douglas A., Mandatory Buy-Out Agreements for Stock of Closely Held Corporations. Michigan Law Review, Vol. 68, p. 1, 1969. Available at SSRN: https://ssrn.com/abstract=983804