Cross-Purchase Agreement

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The Criss-Cross also called the Cross-Purchase Agreement. The underlying need is for the continuity of the business and to avoid forced business liquidation. Is a particular type of Buy-Sell Agreement and is most common whenever there are usually only two, three, or four shareholders in the corporation and it is not likely that more will be added. It can be a cumbersome arrangement if more shareholders will be added.

A Cross-Purchase Agreement is a corporate document that allows a company’s partners/shareholders to purchase the shares (interests) of the partner/shareholder who either dies, becomes incapacitated or retires from the business. The need for life insurance policies in the event of death is required to facilitate the exchange of the deceased partner/shareholder’s interests or shares

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