Topics

Transfer restrictions and buy out rights

Buy out rights and transfer restrictions prevent shares from moving unexpectedly to third parties, heirs or departing family branches. At the same time they must not block a sensible transfer.

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Protect the shareholder circle

Transfer restrictions protect the business against unwanted third parties. In succession, they also need to allow the intended person to take over.

Define permitted shareholder circle
Set allowed transfers
Review family exceptions

Use transfer approvals properly

An approval requirement needs a competent body and understandable criteria. Otherwise the approval itself becomes a dispute.

Define competent body
Formulate approval criteria
Regulate decision deadlines

Trigger buy out rights

Death, sale, withdrawal, exclusion, insolvency or enforcement can trigger a buy out right. Each trigger needs a clear process.

Review all triggers
Set exercise period
Structure buyer group

Valuation and settlement

The acquisition price must not be random or impossible to finance. Valuation method, date and payment terms belong in the articles.

Clarify valuation method
Define valuation date
Protect business liquidity

Typical client questions

Can co shareholders prevent heirs from entering?
How is the acquisition price determined?
Can a transfer within the family be made easier?