State statutes governing the statutory close corporation mandate that the owners enter into a buy-sell agreement. Moreover, sound business planning dictates that a buy-sell agreement also be used in a limited liability company (LLC) or conventional corporation.
Ownership certificates must be endorsed with notice of the restriction on transfer created by the buy-sell agreement. In many cases, state statutes require that precise language be used in the ownership certificates. Thus, it is important to examine the particular state's statute and incorporate the exact required language into all ownership certificates.