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Arizona Buy-Sell Agreement Template

The Arizona rules that shape the document: equal community-property management with limited spousal joinder, and the Section 10-1434 buyout in lieu of dissolution.

Introduction

A buy-sell agreement is the contract Arizona co-owners use to decide, ahead of time, who may buy an owner's share of the business, at what price, and on what triggering events such as death, disability, divorce, or departure. In Arizona, two rules shape the document beyond the national template. First, Arizona is a community property state that uses equal management: under A.R.S. 25-214 either spouse separately may dispose of a community-property business interest, and joinder of both spouses is required only for real property, guaranty or suretyship, or binding the community after a dissolution petition. Second, A.R.S. 10-1434 lets a non-public Arizona corporation, or its shareholders, elect to purchase a petitioning shareholder's shares at fair value in lieu of dissolution, which your Arizona valuation clause should anticipate.

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Key Things to Know

  1. 1

    An Arizona buy-sell agreement is a binding contract among the co-owners of a business that fixes who can buy a departing owner's interest, the price or valuation method, and the triggering events, so a death, divorce, or exit does not force the business into a dispute or a sale to an outsider.

  2. 2

    Arizona is a community property state, but it uses equal management. Under A.R.S. 25-214 the spouses have equal management, control, and disposition rights, and either spouse separately may dispose of a community-property business interest. Arizona has no business-specific spousal-consent trigger like some other community property states.

  3. 3

    In Arizona, A.R.S. 25-214 requires joinder of both spouses only for a transaction involving an interest in real property, a guaranty, indemnity, or suretyship, or binding the community after service of a dissolution, legal separation, or annulment petition. Add a spousal joinder block worded to these Arizona triggers.

  4. 4

    In Arizona, A.R.S. 10-1434 lets a non-publicly-traded corporation, or one or more shareholders if it does not act, elect to purchase all shares of a petitioning shareholder at fair value in lieu of dissolution. Your Arizona valuation clause can set the method the owners prefer instead of a court's fair-value determination.

  5. 5

    Under A.R.S. 10-1434, an Arizona election to purchase in lieu of dissolution is filable within 90 days after the dissolution petition and is irrevocable unless the court finds it equitable to set the election aside. Pricing your Arizona buyout in advance keeps owners out of that fair-value proceeding.

  6. 6

    In Arizona, no notarization, witnesses, or government filing is required for a buy-sell agreement. It is valid as a signed writing under Arizona's statute of frauds, A.R.S. 44-101, which requires the agreement or a memorandum to be in writing and signed by the party to be charged. Keep it with the company records.

  7. 7

    Fund the Arizona buyout before you need it. Owners commonly use life or disability insurance, a sinking fund, or installment payments so the agreed valuation can be paid, rather than leaving the price to an A.R.S. 10-1434 fair-value determination. Match the funding to your Arizona valuation.

Key decisions before you file

Before you file a Buy-Sell Agreement in Arizona, a few decisions shape the document: which option to choose and what each one means. The Buy-Sell Agreement guide walks through them.

Open the Buy-Sell Agreement guide

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Arizona Buy-Sell Agreement (Compact State Terms)

This compact set states the Arizona-specific terms of a Buy-Sell Agreement. Use it together with the full national Buy-Sell Agreement template, which contains the general purchase, trigger, and closing provisions.

1. Governing Law. This Agreement is governed by the laws of the State of Arizona, without regard to its conflict-of-laws rules.

2. Community Property; Spousal Authority and Joinder. Each married Owner acknowledges that an interest in the Company may be community property under Arizona law. Under Arizona A.R.S. 25-214, the spouses have equal management, control, and disposition rights over community property, and either spouse separately may dispose of a community-property business interest such as the interest governed by this Agreement. The parties acknowledge that A.R.S. 25-214 requires joinder of both spouses only for (a) a transaction for the acquisition, disposition, or encumbrance of an interest in real property, (b) a transaction of guaranty, indemnity, or suretyship, or (c) binding the community after service of a petition for dissolution of marriage, legal separation, or annulment that results in a decree. Where any transfer under this Agreement encumbers real property or involves a guaranty, indemnity, or suretyship, both spouses shall join; the spouse of each married Owner signs the Spousal Joinder below to consent to this Agreement's transfer restrictions to the extent permitted by law.

3. Restrictive Covenant. Any covenant by a selling Owner not to compete is enforceable in Arizona under the common-law reasonableness standard, which weighs geographic scope, duration, and the protection of goodwill purchased from the selling Owner. The selling Owner agrees not to carry on a similar business within [specify counties or geographic area] for [specify a reasonable period], and the parties intend the restriction to be limited to what is reasonable and necessary to protect the Company's legitimate interests in Arizona.

4. Valuation; Buyout in Lieu of Dissolution. The purchase price is the [fixed price / formula / appraised fair value] stated in the national template, updated at least [annually]. The parties intend this valuation to control any purchase of a departing Owner's interest, including an election by the Company or one or more Owners to purchase a petitioning shareholder's shares at fair value in lieu of dissolution under Arizona A.R.S. 10-1434, and elect the method above in place of a court fair-value determination to the extent the law and the Company's articles permit.

5. Execution. This Agreement is effective when signed by the Owners and the Company. No notarization, witness, or filing is required; a signed writing satisfies Arizona's statute of frauds, A.R.S. 44-101.

Spousal Joinder. The undersigned is the spouse of an Owner. I have read this Agreement, consent to it, and agree that my interest, if any, in the Owner's business interest is subject to its terms, and I join in any transfer under this Agreement that requires joinder under Arizona A.R.S. 25-214.

Owner: ______________________ Date: __________

Spouse: _____________________ Date: __________

This compact Arizona set supplements the national Buy-Sell Agreement template. It is general information, not legal advice; attorney review is available.

Arizona Requirements for Buy-Sell Agreement

Arizona Equal Community-Property Management (A.R.S. 25-214)

Arizona is a community property state that uses equal management. Under A.R.S. 25-214 the spouses have equal management, control, and disposition rights, and either spouse separately may dispose of a community-property business interest. Arizona has no business-specific spousal-consent trigger, so draft the block to the equal-management rule.

Arizona Spousal Joinder Triggers (A.R.S. 25-214)

In Arizona, A.R.S. 25-214 requires joinder of both spouses only for a transaction involving an interest in real property, for a guaranty, indemnity, or suretyship, or to bind the community after service of a dissolution, legal separation, or annulment petition. Include an Arizona spousal joinder worded to these triggers.

Arizona Buyout in Lieu of Dissolution (A.R.S. 10-1434)

Arizona A.R.S. 10-1434 lets a non-publicly-traded corporation, or one or more shareholders if it does not act, elect to purchase a petitioning shareholder's shares at fair value in lieu of dissolution. Draft the Arizona valuation clause to set the method the owners prefer instead of a court fair-value determination.

Arizona 90-Day Election Window (A.R.S. 10-1434)

Under Arizona A.R.S. 10-1434, an election to purchase in lieu of dissolution is filable within 90 days after the dissolution petition and is irrevocable unless the court finds it equitable to set it aside. Pricing your Arizona buyout in advance keeps owners out of that fair-value proceeding.

Arizona Signed Writing; No Notarization Required (A.R.S. 44-101)

An Arizona buy-sell agreement is valid as a signed writing under the statute of frauds, A.R.S. 44-101, which requires the agreement or a memorandum to be in writing and signed by the party to be charged. No notarization, witnesses, or filing is required. Keep the signed Arizona agreement with the company records.

Frequently Asked Questions

It is a contract among the owners of an Arizona business that sets who may buy an owner's interest, the price or valuation method, and the triggers such as death, disability, divorce, or a voluntary exit. It keeps ownership inside the group and prevents disputes when an owner leaves.

An operating agreement or bylaws set how the Arizona business runs day to day. A buy-sell agreement covers only ownership transitions: what happens to an owner's share on death, disability, divorce, or departure, how it is priced, and who may buy it. Many Arizona companies keep both.

Arizona is a community property state with equal management under A.R.S. 25-214, so either spouse may dispose of a community-property business interest alone. Joinder of both spouses is required only for real property, a guaranty or suretyship, or binding the community after a dissolution petition. A spousal joinder still avoids later claims.

In Arizona, A.R.S. 25-214 requires joinder of both spouses for a transaction involving an interest in real property, for a guaranty, indemnity, or suretyship, or to bind the community after service of a dissolution, legal separation, or annulment petition. Otherwise either spouse may act alone on a community-property interest.

Arizona A.R.S. 10-1434 lets a non-publicly-traded corporation, or its shareholders if it does not act, elect to purchase all shares of a petitioning shareholder at fair value in lieu of dissolution. A clear valuation clause in your Arizona buy-sell can set the method used instead of a court fair-value determination.

No. Arizona requires no notarization, witnesses, or filing. A buy-sell agreement is valid as a signed writing under Arizona's statute of frauds, A.R.S. 44-101, which asks that the agreement or a memorandum be in writing and signed. Keep the signed agreement with the company records and update the valuation periodically.

Arizona owners commonly use life or disability insurance on each owner, a sinking fund, or installment payments from the buyer. Pre-funding matters because an Arizona buyout can otherwise be priced at fair value under A.R.S. 10-1434. Match the funding to your valuation so the agreed price can be paid.