A redemption agreement is a legal document drafted when an organization redeems its shares or leaves the business it is involved in. This usually happens when a company is undergoing losses or the business is not running smoothly.
The organization may also pass on the business to another organization resulting in change of ownership. It is a process of making the business transition smoother. As per the agreement the organization sets up a situation so that the shares or stake of it can be repurchased by the organization later.
There are few vital information required to be mentioned in this agreement. They are as follows:
- The price at which the stock of the organization will be redeemed
- The business law under which the agreement is drafted
- The terms and conditions that both the parties entering into the agreement need to follow
- The termination date of the agreement
[Also Read: Restructuring Agreement]
Sample for Redemption Agreement
A sample of the agreement can be downloaded from below.
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