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| How to Structure a Stock Purchase Agreement (Template) Posted: 10 Feb 2021 05:30 AM PST  Between 1996 and 2017, the number of companies that publicly traded stocks changed drastically. The roughly 50% drop in the number of public U.S. companies during this period suggests that a significant amount of stock exchanges are taking place far away from Wall Street. And that leads us to stock purchase agreements. With stock purchase agreements, you can sell shares of your company directly to buyers outside of the stock market. With the money you raise from these sales of company stock, you can fund new business initiatives without going public. And since you and your buyers sign legally binding agreements, you can protect your assets – and company – as you raise money. Below, learn more about these contracts and find a stock purchase agreement template. What is a stock purchase agreement?A stock purchase agreement is a two-party contract that dictates transactions around a company's shares. Stock purchase agreements are common among small corporations; they provide capital while allowing you, the business owner, to retain a controlling interest. Usually, a stock purchase agreement will empower both the business owner and your company's shareholders to sell stocks. How does a stock purchase agreement work?A stock purchase agreement formally transfers ownership of your company's stocks between two parties. When shares of your company's stocks exchange hands, your company's ownership also changes. Someone who sells all of their stocks to another party no longer has any stake in your company. The new buyer, though, now has a stake in your company equal to what the seller previously had (or more, if the buyer already had stock in your company). Stock purchase agreements differ from asset purchase agreements. Although both agreements have similar frameworks, the latter governs transactions of specific assets or liabilities rather than shares of company ownership. For example, if you sell your equipment to another company, you may want to sign an asset purchase agreement, since no company ownership changes will occur. If you instead sold shares of your company to this other party, a stock purchase agreement would be in order. Notably, when buyers purchase shares of your company, they assume all assets and liabilities tied to your stocks even if you do not disclose them. Who needs a stock purchase agreement?Financial regulations state that, for any stock transaction, both parties must give written consent. If you're preparing to sell stocks in your company, you'll want to have a stock purchase agreement template readily available that you can then easily modify to reflect the terms of the sale and the buyer's information. What is included in a stock purchase agreement?You typically see the following in a stock purchase agreement:
The above information is typically grouped into several articles that comprise your stock purchase agreement's structure. Stock purchase agreement templateHere is a template of a stock purchase agreement that you can copy and paste into a word processing program and save to your company files. This template is intended to serve as a guide only and does not constitute legal advice. Always consult with legal counsel before finalizing and legal documents.
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| What Are Qualifying Life Events, and How Do They Impact Your Health Insurance? Posted: 10 Feb 2021 04:30 AM PST  Each year, health insurance providers hold an open enrollment period, during which employees of the companies they serve can sign up for coverage or make changes to their existing coverage. For most employees, this is the only time of the year they can make these designations or changes to their health insurance benefits. The exceptions are when they experience a qualifying event, also known as a "qualifying life event." It is your responsibility as a business owner to ensure you and your employees understand what a qualifying event is, and how to avoid potentially expensive gaps in coverage. What is a qualifying event?A qualifying event is a milestone in a person's life that makes them eligible to take advantage of a "special enrollment period" – a span of time outside the open enrollment period during which individuals can make and act on decisions about their health insurance coverage. For example, if an employee has a baby or adopts a child, they can add the child to their insurance plan without waiting for open enrollment. "Numerous qualifying life events exist, but what they all have in common is the potential to significantly alter your health insurance or preferences," said independent health insurance agent Michael McNulty of Mayfair Medicare. "And whether your new circumstances demand greater protection, affordability, or flexibility, you can use the special [enrollment] period after a qualifying life event to adjust your coverage." [Need help with open enrollment and health insurance benefits? Learn how a PEO can help. Check out our best picks and reviews.] Which events are considered a qualifying event?There are four types of qualifying events: Changes in household
Changes in residence
Loss of health coverage
Other
Under what circumstances are employees ineligible for the special enrollment period?Employees who have lost healthcare coverage because their health insurance premiums were not paid cannot purchase other healthcare coverage due to a qualifying life event, said James Major, founder and owner of insurance quote comparison portal Insurance Panda. Committing a fraudulent act also makes people ineligible to use a qualifying event to modify or add health insurance coverage. A divorce or legal separation is a qualifying life event only if the employee loses healthcare coverage provided by their former spouse's employer. Employees who already have their own healthcare policy at the time of divorce are not eligible for the special enrollment period. How long does the special enrollment period last?Time restrictions can vary according to circumstances, and certain special enrollment periods in Medicare can be valid for up to a year. In general, though, the special enrollment period lasts 60 days. That countdown starts the day the qualifying event occurs. If, for example, an employee gets married on Jan. 14, the special enrollment period begins on Jan. 14 and ends on March 14. "You'll have 60 days from the date of the qualifying event to update your coverage," said Melanie Musson, health insurance specialist at USInsuranceAgents.com. "If you don't do it within that time limit, you'll have to wait until the next open enrollment period." Employees who are without healthcare coverage because they didn't take advantage of the special enrollment period could suffer a big financial blow, such as a staggering hospital bill in the case of an unforeseen emergency. How can employers help employees when it comes to qualifying events and the special enrollment period?It is critical for employers to educate their employees about qualifying events and remind them to utilize the special enrollment when necessary. "I would encourage employers to be proactive in how they share information about qualifying events," McNulty said. "A best practice is to educate new employees on what a qualifying event is during initial onboarding, or whenever insurance options are shared with employees." If you learn that an employee has a qualifying event coming up – for instance, they announce that they are getting married or expecting a baby – make a note of it, and remind them to make the appropriate changes to their coverage within the special enrollment parameters. Just as importantly, urge employees to ask any questions about healthcare plans available through your company and to discuss their options. You can also take some stopgap measures to help employees. At one time or another, you will probably have employees who are in between enrollment periods but do not qualify for the employer-sponsored healthcare plan because they have not yet experienced a qualifying event. Michael Hammelburger, CEO of The Bottom Line Group, said one option is to provide those employees with short-term health insurance to fill in the gap. This is temporary health coverage for doctor visits, emergency room or urgent care visits, and preventive care. What can employees do to avoid missing out on special enrollment when they have a qualifying event?1. Keep employers abreast of upcoming life changes.Many qualifying events are unforeseen. But others, like getting married or having a baby, can be prepared for well in advance. Employees should keep their employer in the know about any upcoming qualifying events so both parties can discuss any new health insurance options the event might trigger. If you are in this situation, be proactive to ensure you have the time to study all of the available options. 2. Be prepared to submit documentation.Employees may be required to prove that a qualifying event has occurred. For example, they might need to produce a marriage certificate, a divorce decree, a birth certificate or adoption papers. Failure to prepare and submit these documents can cause issues. Even if you end up not needing it, you should keep this documentation on hand so you aren't scrambling to find it at the last minute. A qualifying event can be happy or not. Either way, employers and employees must pay close attention to the special enrollment period, in turn maximizing employees' healthcare coverage and minimizing risk. |
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