Legal Question in Business Law in Maine

Re: Death of Primary shareholder

In my practice of setting up and working with closely held corporations, I will review succession issues. Often, the Bylaws of the corporation address one shareholder's rights to buy the shares of another, and death may be one covered circumstance. However, a seperate cross- purchase agreement may need to be created for the shareholders to agree in advance how the transfer of shares would work at death. Usually a Will is also drafted that will direct the Personal Representative to comply with the cross-purchase agreement, and often life insurance is purchased to provide the money that will be paid in exchange for the shares. In other words, you may efficiently acquire the shares upon his death, but his son will still benefit from insurance proceeds and not feel like he is entitled to the shares since he "sold" them to you from his father's estate.

That is the basic concept of a common way to handle it, although there are other ways. Feel free to contact me directly if you wish to pursue. Thanks-