How To Use
The above Shareholder Assumption Agreement permitting transfer of shares in your corporation incorporates three elements into the one document for simpler tracking purposes: the Assumption Agreement itself; Board approval and ratification; and notification by the Corporate Secretary of receipt of both.
- Be sure all parties sign the agreement with multiple originals for the old shareholder, the new shareholder, Board records, corporate minute book records, and a record for the file of the new shareholder held at the company.
- You must vigilantly protect your original Shareholder Agreement if you desire to keep it in full force and effect. If you make an exception, you open the door for future challenges.
- Prompt record keeping in this regard will prevent costly attempts to reconstruct it at a later date, usually when needed in a hurry, and many of the principals have ceased being active participants in the company, and may, in fact, be estranged from the firm and unwilling to assist you in cleaning up back records. So, for all of the above reasons, do this in a timely manner.
- A practical suggestion is to gather all documents requiring Board signature and make them available at the next physical Board meeting. This simplifies the signature process and incorporates the documents into the minutes of the meeting, always a good thing for record preservation.