Buy or Sell Clause

This is an exit clause. It allows a conflict between shareholders to be resolved by offering each the alternative of selling their shares or buying those of the other shareholder.

In concrete terms, it allows a shareholder A to propose to another shareholder B to buy back his shares. B may then either choose to sell his shares to A at the proposed price or, if the price proposed by A is undervalued, choose to keep his shares and demand the repurchase of those of A for an identical price. It is therefore a question of a double offer: an offer to sell the shares and, failing that, an offer to buy the shares of the other shareholders.

In the first case, B exits the company’s capital and leaves the company, whereas in the second case, B increases its capital holding and A leaves the company.


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