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
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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
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
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
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
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
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.
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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.
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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.