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Voluntary transfer. One of the main concerns of entrepreneurs is the limitation of the transfer of shares over the life to a competitor or other undesirable counterparty. Under the laws of most states, an inappropriate restriction on the transfer of shares is not applicable. Section 6.27 (c) of the Model Business Corporation Act states that limiting the transfer of shares is permitted for any „appropriate“ purpose. In addition, a buy-back agreement may affect the use of family commanders or similar instruments that create evaluation discounts. Entrepreneurs may also find that a better price can be obtained for the business if it is sold during the life of a key owner and not after his or her death. The two practical options are (1) to create an LLC or partnership to have a policy on the lives of each of the six shareholders, or (2) the appointment of an agent or agent who conducts a policy of its own on the lives of each of the six shareholders. You may be wondering why, for example, each of the six shareholders cannot simply follow their own policy against each other. For example, shareholders A, B, C, D and E could jointly pursue a policy on the lives of F shareholders. While co-ownership can solve the need for multiple insurance policies, co-ownership probably creates a value transfer problem, because after the death of an owner, the interests of the remaining owners are „transferred“ to each co-management policy. If F dies, the estate will likely transfer value by passing on the life policy portion from A to B, C, D and E. It is a good idea to document the restrictions that apply to shares held by a shareholder who terminates his employment, whether because of retirement or for some other reason.

Most entrepreneurs do not want a shareholder who has terminated his or her job or is retiring to retain his or her shares. The accumulation of cashback value in some life insurance or money saved in trust and placed in trust can provide money for the purchase of all or part of the shares of a licensed shareholder. The balance of the purchase price can be paid according to the terms of a debt. If the financing is not insured, the purchaser (i.e. either the company or the other shareholders) may have the opportunity, but not the obligation to acquire the shares. It may also be advisable to provide that in the event of a termination of „vercause“ the purchase price is less than the purchase price that would otherwise have been applied.