Most transactions start with one party submitting a letter of intent to the other detailing their request. Both the buyer and seller can initiate drafting the contract, but it is usually the buyer, as they benefit most from the protection covered by the contract.
If both parties are happy to pursue the deal, then the legal document is drafted. You can easily find a stock redemption agreement sample or template online at reliable legaltech ecosystem Lawrina to help with the formatting and language. However, as a legally binding contract, stock redemption agreements are long and complex with several different annexes and must be written using specific legal terminology. Because of this, they are best left to an attorney.
For the agreement to stand, it then has to be signed by both stockholders with a witness present. A signed copy of the document will then be given to each party to keep on record. When needed, either party can present the contract and release the funds or stocks to the other party as outlined.
Check out a Stock Purchase Agreement (SPA), a legal document businesses use to transfer shares from a business to a new buyer. Without an SPA, no sale is considered legally binding, which could put the business at financial risk and lead to potential litigation.