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A Buyout Agreement sets clear rules for how business owners can sell their shares or ownership stakes to other partners or the company itself. In Nigeria, these agreements protect both departing and remaining owners by establishing fair pricing methods and payment terms under the Companies and Allied Matters Act (CAMA).

Common triggers for using a buyout agreement include retirement, death, disability, or when an owner wants to exit the business. The agreement helps prevent disputes by spelling out each step of the process, from valuation methods to payment schedules. Many Nigerian businesses use these agreements alongside their Articles of Association to ensure smooth ownership transitions.

Consider putting a Buyout Agreement in place when starting a new business partnership or bringing new shareholders into an existing Nigerian company. This agreement becomes essential before major changes like expanding ownership, seeking investors, or when partners have different long-term plans for the business.

Smart timing for creating a Buyout Agreement includes moments when relationships are positive and partners can think clearly about future scenarios. It's particularly valuable when partners have unequal investments, different management roles, or when the business holds significant intellectual property. Having these terms ready before conflicts arise helps avoid costly disputes under Nigerian corporate law.

• Standard Buy-Sell Agreement: Sets basic terms for partner exits and share transfers, commonly used by small Nigerian businesses
• Cross-Purchase Agreement: Partners directly buy shares from departing members, maintaining control distribution
• Entity-Purchase Agreement: The company itself buys back shares, simplifying the transaction process
• Hybrid Buyout Agreement: Combines both cross-purchase and entity-purchase options for flexibility
• Insurance-Funded Agreement: Uses life or disability insurance to fund potential buyouts, popular among professional partnerships

• Business Partners/Shareholders: Primary parties who sign and are bound by the Buyout Agreement, including both majority and minority shareholders in Nigerian companies
• Corporate Lawyers: Draft and review agreements to ensure compliance with CAMA and other Nigerian business laws
• Company Directors: Negotiate terms and execute the agreement on behalf of the corporation
• Financial Advisors: Help determine fair valuation methods and structure payment terms
• Insurance Providers: Offer life or disability policies that fund potential buyouts when triggered

• Company Details: Gather current shareholding structure, company registration details, and Articles of Association
• Ownership Information: List all shareholders, their stakes, and contributions to the business
• Valuation Method: Agree on how the business will be valued when triggering the agreement
• Trigger Events: Define specific circumstances that activate the buyout provisions
• Payment Terms: Outline payment schedule, financing options, and security arrangements
• Documentation: Our platform generates legally-sound Buyout Agreements tailored to Nigerian law, ensuring all critical elements are included

• Party Identification: Full legal names and details of all shareholders and the company
• Trigger Events: Specific circumstances activating the buyout option under Nigerian law
• Valuation Formula: Clear method for calculating share prices when buyout occurs
• Payment Terms: Detailed structure of payment including timing and funding sources
• Transfer Mechanics: Process for executing share transfers under CAMA requirements
• Dispute Resolution: Nigerian jurisdiction and arbitration procedures
• Governing Law: Express statement of Nigerian law application and enforcement

A Buyout Agreement differs significantly from a Business Acquisition Agreement in several key aspects under Nigerian law. While both deal with ownership transfers, they serve distinct purposes and situations.

• Scope and Purpose: Buyout Agreements focus specifically on internal ownership transfers between existing shareholders or back to the company, while Business Acquisition Agreements cover the complete purchase of a business by external parties
• Trigger Mechanisms: Buyout Agreements activate on specific predetermined events (death, retirement, disability), whereas Business Acquisition Agreements execute immediately upon signing
• Relationship Context: Buyout Agreements manage ongoing relationships between known parties, while Business Acquisition Agreement typically involves new parties entering the business structure
• Valuation Methods: Buyout Agreements often use pre-agreed formulas, while Business Acquisition Agreements usually involve negotiated market-based valuations