There are three types of taxes that should be taken into account when shareholders want to complete an agreement. These include inheritance tax, capital gains tax and income tax. If the shares have a 100% relief for commercial real estate, the estate will not be subject to inheritance tax on the value of the stock. To do this, specific cross-cutting options can be developed. Cross-option agreements can also be developed for operation in the event of a terminal or critical illness to an owner-manager. This would allow the sick owner-manager to force the purchase of his shares by other owner-managers, so that he can withdraw from the business and be properly compensated for it. Contrary to the death attitude, however, they cannot be forced to sell their shares to the remaining owners. The only way is to allow the patient to either release funds he has invested or to allow him to settle their affairs before he dies. Shareholder or partnership protection is life insurance underwritten by one or more shareholders. In this type of life insurance, other shareholders are generally chosen as beneficiaries of the insurance policy.
This allows other shareholders to buy back the funds from a shareholder in the event of death. An option agreement (also often referred to as a dual option agreement) is an agreement that can be included in shareholder protection insurance, which ensures that the sale of its stock runs smoothly when a shareholder falls ill or dies. It can be subscribed by all shareholders within the team and each shareholder decides on its significant share of the shares. Shares can be evaluated in three ways (which are discussed below) and the cross-option agreement is carefully designed, so that there will be no unexpected tax burdens after the death of the shareholder. In addition, in the event of a takeover by the company itself, at the time of the takeover, there must be sufficient distributable reserves in the business (i.e. at the time of the exercise of the option and not at the time of the conclusion of the agreement). It is essential that the person entering into the option agreement recognize the need to ensure that he or she does not violate certain inheritance tax provisions that could not render the transfer of the shares for the commercial real estate exemption ineligible. It is essential that the ability of permanent shareholders to purchase the deceased`s shares and the ability of the deceased`s personal representatives to sell the shares be formulated as a right and not as an obligation.